A September 2019 ruling from the Kansas Board of Tax Appeals (BOTA) admonished the Johnson County Appraiser’s Office for illegally hiking appraised values on Walmart and Sam’s Club stores. The panel said, “…the County admittedly is making its record for an appeal seeking the reversal of Kansas precedent….” As previously reported by The Sentinel, some county appraisers are trying to convince legislators and homeowners that large commercial retailers – ‘big box’ stores – are trying to get property tax breaks with a so-called ‘dark store’ theory, basing appraised values on just the land and building as though it is empty or ‘dark.’ But that’s the way those properties are supposed to be appraised under existing state law.
According to Dave Trabert, CEO of Kansas Policy Institute (which owns the Sentinel) Johnson County is trying to pull a fast one on residents. First, the county illegally jacked up appraisals on big-box retailers and concocted an ominous-sounding ‘dark store’ myth for cover. When retailers appealed, county officials warned they may have to raise property taxes on homeowners if the retailers get their taxes reduced.
“It’s like saying ‘we built our budget assuming we could steal from one group of taxpayers, so if the state won’t let us, we’ll have to steal from someone else,’” Trabert says.
Prior to 2016, Johnson County appraised big box stores based on the value of the building and the land it sits on – in accordance with state law. Then they changed their appraisal methods, valuing big-box retailers based on lease-in-place and the business value. As an attorney for several of the big box retailers has described the practice: It’s like appraising a home based on not just the house and the land but on how much the current residents earn.
This isn’t the first time that counties tried to get away with illegally raising appraised values. The BOTA ruling on Walmart references a 2017 Kansas Court of Appeals decision that rejected Sedgwick County’s appraisal of Target stores, citing another appellate decision which “…specifically found it permissible to determine the difference between the value of the property under a hypothetical vacant condition and its value as occupied in order to isolate the value of the taxable real estate separate and apart from the business being conducted in it.”
BOTA found in favor of the taxpayer on each of Johnson County’s big-box appraisal appeals, citing past legal precedent, but the county commission persists with its ‘dark store’ theory and voted to appeal to those rulings to other courts.
In the meanwhile, county officials continue scaring taxpayers with the threat of more property tax increases rather than follow the law and find ways to operate government more efficiently.