LANSING — State Representative John Kivela (D-Marquette) said that approval of Republican state Rep. David Maturen’s (R-Vicksburg) bill, House Bill 5578, is good for his Upper Peninsula communities because the bill closes a loophole created by recent court decisions dealing with dark stores. HB 5578 would require the Michigan Tax Tribunal to make its own independent determination when issuing a decision in a commercial property dispute case.           

“I want to thank Rep. Maturen and the House for moving HB 5578 to the Senate, because this bill creates a level playing field for local governments when arguing cases at the Michigan Tax Tribunal,” said Kivela. “Dark store decisions that created a property tax loophole have taken millions of dollars out of communities in my district and across the state. Losing that tax money has hurt services that residents depend on. I hope that when this bill wins Senate approval that we can see a change in these dark store decisions and relief for our communities.”

Big-box stores have successfully argued to the Michigan Tax Tribunal that their taxes should be drastically reduced by using what’s known as the “dark store” argument. The stores argue that the value of their store should be compared to the value of older closed and vacant stores worth far less than what it cost to build a newer store and they should pay less in taxes on the newer store. This argument allows them to win huge tax refunds that decrease the property tax base in Michigan and is devastating to state and local government budgets.

Kivela was the only U.P. member of the legislative workgroup led by Rep. Maturen aimed at addressing these dark store rulings. The legislative workgroup meetings were the catalyst behind HB 5578.

 “Fixing the dark store problem has been my goal ever since I came to Lansing, and this bill is step in that direction,” said Kivela. “I look forward to winning quick passage of the bill in the Senate.”