Judge has 20 days to make decision on Walmart tax assessment

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After presiding over a hearing Wednesday, Pulaski County Judge Barry Hyde has 20 days to give a decision in a case with significant financial implications across Arkansas. Judge Hyde’s decision can be appealed to circuit court.The case leading to Wednesday’s hearing involves Walmart’s property tax assessments in Pulaski County, with the retail giant asking to drastically reduce its property assessment through a loophole known as the “dark store theory.”Baxter County Assessor Jayme Nicholson said earlier the case is one like many across the country where big-box retailers including Walmart, Home Depot, Target and Walgreens are seeking to slash their property taxes.

The concept behind the case is called the “dark store theory” because working stores are compared to closed ones. The large retailers contend their fully operational, often thriving businesses should be assessed the same as vacant buildings or “dark” stores.

The Arkansas Democrat-Gazette reports this is the theory’s first major test in Arkansas, according to assessors. Retailers have seen mixed success in other states when pursuing the argument.

Ryan Wilson, a private attorney hired by Walmart, says, “This case is not about accepting or rejecting one theory over another. It’s about finding the true market value — what Arkansas law requires.”

Washington County Assessor Russell Hill estimates more than $100 million in local tax dollars statewide are at stake should Walmart set statewide precedent and should other retailers follow their tracks.

The core argument advanced by Walmart Wednesday is that the buildings on the land it owns are so customized to their own needs that they cannot fetch a price on the open market that is comparable to their valuation for tax purposes.

Nicholson said earlier while the large stores make this choice to keep a competitor from moving in, it does not give them the right to be treated in a manner different than any other property owner for tax purposes.

She says the issue is one of fairness.


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The Baxter County assessor says she has reviewed the assessments locally for Walmart, Lowe’s, Home Depot and the Hobby Lobby building. She says a 50 percent reduction in the assessments of these four businesses would mean a reduction of $100,000 in revenue to Baxter County.

Nicholson says she has heard it could take another year or more for the Pulaski County case to be settled, perhaps leading to a decision by the Arkansas Supreme Court. A decision by the supreme court would be binding in all counties.

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