Wal-Mart: America’s Tax Deadbeat

This article originally appeared on the Huffington Post.

A report released this week by the non-profit group Good Jobs First, concludes that Wal-Mart methodically works to lower its taxes by challenging the assessed value of its stores and distribution centers. Just as the company has become legendary for shaking down its vendors---so the retailer shakes down cities and towns for tax rebates.

The nonpartisan research center in Washington, D.C. documented in an earlier study how Wal-Mart has benefited from billions of dollars in public subsidies to build its stores and site infrastructure. Their new analysis, Rolling Back Property Tax Payments, charges that although the financial take is not as large as its public welfare subsidies---Wal-Mart “drains vitally needed funds from communities by regularly challenging the valuation put on its properties by public officials.” According to Philip Mattera, research director of Good Jobs First, “When the company succeeds in one of these challenges, it diminishes the funds available to pay for education, police and fire protection, and other essential services provided by local governments.”

Good Jobs First reviewed a national sample of Wal-Mart stores and all of its distribution centers open as of the beginning of 2005. Wal-Mart has filed assessment challenges at more than one-third of its facilities around the country. At many facilities there have been appeals in multiple years. Overall, Good Jobs First estimates that Wal-Mart filed more than 2,100 property tax challenges nationwide. “These systematic property tax challenges are part of a larger pattern of state and local tax avoidance by Wal-Mart,” Mattera explained.

Property assessment disputes pit Wal-Mart’s legal team against local assessors. Such battles are an intimidating financial club wielded by Wal-Mart to lower its cost of doing business. If local assessors balk at giving relief, Wal-Mart just takes their case to a state appellate board, tying up local staff and resources.

Yet Wal-Mart’s success rate in such appeals is as low as its prices. “We were surprised to find that Wal-Mart, despite its enormous resources, loses more assessment challenges than it wins,” said Greg LeRoy, of Good Jobs First. “Even when it wins a reduction, it often fails to get as much as it wanted, meaning that the overall dollar amount of Wal-Mart’s tax reductions is far below what the company sought.”

The Good Jobs First report found that the company’s win rate in assessment challenges is just under 50%, and that it has won a total of about $30 million from those appeals over the past decade. Good Jobs First found significant variation in the frequency of assessment challenges from state to state. The largest numbers, both in percentage and absolute terms, were found in Texas. More than 80% of the Texas stores had at least one tax challenge. Other states found to have high appeal rates were Colorado, Kansas, California, New Hampshire and Georgia. While Texas has the most appeals, the company’s success rate in the state has been only 43%, far below the 82% success rate in Florida, for example. In California, the state where Good Jobs First found the second largest number of appeals, its success rate has been even lower: 25%.

Although Wal-Mart’s overall tax abatement campaign has drawn mixed results, the company has won big tax cuts in some towns. In 2004, Wal-Mart’s distribution center in Tomah, Wisconsin was lowered from $43.6 million to $31.4 million, and the company clawed back $300,000 for each of three years--a total of $949,000.

I have been writing about Wal-Mart’s tax abatement campaign for at least eight years. Back in 1999, Wal-Mart dragged the small town of Wilton, New York to court over its property tax bill. Wal-Mart disputed its property valuation in Wilton for 4 years, and ultimately sued the town in the New York State Supreme Court. Wal-Mart wanted Wilton to slash its discount store assessment from the $7.5 million in valuation, to $3 million--a 60% tax reduction. The taxpayers of Wilton had to hire a special attorney to argue the case, and spent $2,250 in tax dollars to have a special appraisal done. Because of the expense of defending itself against the Wal-Mart litigation, the town had to call on the School District in Saratoga Springs, and Saratoga County to come up with the cash to defend against Wal-Mart---because the county and the school district stood to lose revenue if Wal-Mart’s property taxes were slashed. That same year, Wal-Mart bragged that it paid $28 million in local and state taxes in New York state.

In 2006, the company picked the same fight with Geneva, New York. Wal-Mart sued to get its assessment more than halved, from $4.8 million to less than $2.3 million. Wal-Mart charged that their store’s assessment was too high, because property in the town was assessed at 65% of full value. Wal-Mart eventually dropped the lawsuit, saying “the town has been working well with Wal-Mart on the supercenter...It was a business and policy judgment, in view of the high degree of cooperation. Even though we still object to the store’s assessment, we’d rather go forward with what’s being done on the supercenter.” A local citizen’s group fighting the Geneva superstore, questioned the timing of the retailer’s lawsuit, because it was filed only five weeks after the chain announced its supercenter expansion plans, and just as the permit process was beginning. The lawsuit put pressure on the town to act favorably on the superstore. The citizen’s group charged that Wal-Mart used the lawsuit as “a bargaining chip” to get its supercenter built. The Town’s Supervisor acknowledged that Wal-Mart had unsuccessfully tried to lower its assessment for years, and that Wal-Mart had filed similar lawsuits against municipalities across the New York state. The Town Assessor in Seneca Falls, New York admitted that Wal-Mart files lawsuits against municipalities where supercenter projects are pending and they have existing stores on the real estate market. It’s easier to sell an existing store if it has a lower assessment, she said. Wal-Mart’s lawyer admitted his company had been “very successful” in getting cities and towns to lower their assessments.

In small town after small town, Wal-Mart has picked the same tax fight. In places like Coolbaugh, Pennsylvania, or Saukville, Wisconsin, Wal-Mart promises a tax revenue bonanza, but as soon as they get in, they try to nickel and dime their taxes down. In Coolbaugh, Wal-Mart challenged the assessment on its 208-acre site for a large distribution center. The County Commissioners in Monroe County, along with Coolbaugh officials, and the Pocono Mountain School District, had to raise $6,000 just to hire an appraiser to review the site’s value.

In Saukville, Wal-Mart attempted to lower its store assessment by $1 million. According to the editor of the Ozaukee Press, the abatement would lower Wal-Mart’s tax bill by $21,306. The tax cut would have stripped $11,469 from the Port Washington-Saukville School District---an amount, said the newspaper, “that far exceeds the value of the store’s well-publicized Teacher of the Year award.” The editor of the County newspaper wrote a column criticizing Wal-Mart’s move. “Never mind the fact that the value of almost every property--commercial, industrial and residential--went up this year as a result of a village-wide reassessment; the corporation doesn’t want to pay what the village says is its fair share of taxes.” The editor added, “No matter how hard the store tries to give the impression that it is a concerned member of the business community, the truth is it is part of a chain whose interest in Saukville is, at best, fleeting, and over which the village has little influence.”

The Good Jobs First study demonstrates once again that taxes are just another business expense for Wal-Mart to try to force down---any way possible. In this case, the losers are the very same officials that opened their arms to the retailer.

When this tax dodge study came out this week, instead of assailing the message, Wal-Mart went after the messenger. Study author Phil Mattera told me that Wal-Mart initially did not know how to respond to the Good Jobs First study. “When contacted by the New York Times, which ran the first story on the report, the company was not willing to comment, Mattera said. “Then they reverted to their common practice of union baiting. When reporters contacted Wal-Mart, their public relations people apparently thought that calling Good Jobs First a labor-supported group would discredit our findings. Actually, since our founding, we have received less than 5% of our funding from unions--and most of that has been for consulting work, not donations. Nearly all our money comes from foundations.”
Mattera says that Wal-Mart claims it evaluates each tax assessment on its own merits. “But it is hard to believe that assessors have made serious errors at more than one-third of all of Wal-Mart’s facilities,” he notes. “As for the results themselves, what we have been trying to get people to focus on is Wal-Mart’s hypocrisy. When the company is trying to get into a community, it makes great claims about economic benefits. Yet when they later look for assessment reductions, they have to argue in effect that property values have declined.”

A colleague of mine says that all major corporations try to push down their property tax costs. “I sit on a tax board of review in small town,” he writes. “The Wal-Mart landlord came in last year to appeal their assessment. Long story short—he is ‘connected’ to local family of businessmen who presented us with an appeal ‘we can’t refuse.’ Wal-Mart never stepped foot inside that meeting. They came in without an appointment and walked out as the only business to get their assessment lowered. They presented no evidence other than they just wanted to have it lowered. It came down to my vote to break the tie. I voted for it because the assessor recommended we do so. It came down to a matter of $20,000 of tax breaks a year for Wal-Mart. It would cost $20,000 of village funds to fight them in an appeal. We all knew that voting no could mean a world of hurt for us personally. It makes it so someone doesn’t even want to serve on these boards.”

This coming year, as many as several hundred communities will receive such a visit from Wal-Mart’s lawyers regarding a tax abatement. But enthusiasm for Wal-Mart at the local level continues unabated. Four weeks ago, when Wal-Mart opened up its new supercenter in the small southern Oregon community of Eagle Point, Mayor Leon Sherman was front and center at the ribbon cutting. “We’ve been working for three or four years to get this supercenter,” the Mayor said, “and we’re really happy that they’re here. Not only will the store bring extra jobs, but it will also provide an additional tax base for the city as well as the school district.”

Mayor Sherman is in for a big, supercenter surprise.

Al Norman is the founder of sprawl-busters.com, and author of the book, “The Case Against Wal-Mart.”

Posted by Al Norman on Tuesday, October 16, 2007

COMMENTS

Wal-Mart, always cheap always!

Jane in N.Y. in
Tuesday, October 16 at 04:03 PM

Now let me get this straight. Walmart challenged 1/3 of it’s assessments since 2005. It also goes on to say that in challenges over the PAST 10 YEARS they only won less than 50% totaling about 30 million dollars total… that’s 3 million/year FOR THE ENTIRE COMPANY!! Now for some additional facts.

1. Walmat has EVERY RIGHT to challenge any assessment just like you and I do for our private properties. God forbid you as a homeowner you were shunned if you challenged an assessment on your property.

2. If the assessments were correct all of the time then why did Walmart receive reductions in almost 50% of the challenges over the past 10 years? It seems maybe the local governements wern’t doing a good job of creating valid assessments. That’s not Walmart’s fault.

3. This is 3 million/year over the last 10 years FOR EVERY COMBINED STORE AND DISTRIBUTION CENTER. Are you people kidding me!!!! That’s about than 1/100,000 of their annual revenues. And this is a story about Walmart as a “tax deadbeat”.

Good Jobs First has lost their minds that this is a story and WMW should be embarassed to even post such nonsense crap.

Mary in
Wednesday, October 17 at 01:29 PM

WAL-MART: The Good Corporate Citizen

“...what we have been trying to get people to focus on is Wal-Mart’s hypocrisy.” ~Phil Mattera

Community leaders and decision-makers should remember this when Wal-Mart comes knocking with their promise to be a “good corporate citizen.”

ScrewedbyWal-Mart in Anytown, America
Wednesday, October 17 at 07:54 PM

Mary,

You seem unusually zealous for a standard passerby defending WalMart and their right to appraisal fraud and property tax evasions. Obviously you don’t mind paying higher taxes to make up for WalMart chiseling your county or your state for their REIT rent self payment scheme and income tax frauds. WalMart gets caught shifting the tax burden off onto the taxpayer suckers in addition to the BILLIONS in public subsidies they scam every year and all you can think of as a fellow taxpaying citizen is…

“Good Jobs First has lost their minds that this is a story and WMW should be embarassed to even post such nonsense crap.”

“These capitalists generally act harmoniously and in concert, to fleece the people.”
Abraham Lincoln

SanDiegoView in WalMart is #1 in cancer sales
Thursday, October 18 at 05:28 AM

Wow SDV… a very nice diatribe. It’s ashame it’s PURE CRAP like most of your other posts. Let’s go back to the facts again shall we because you seem to be blind to them.

1. Take your pick… Target, Sears, the local mom and pop store and even you SDV.... I would defend anyone when it comes to THEIR LEGAL rights so you can pretty quit the Walmart “homer” comments. But I guess the anti-walmart crowd will never get it when it comes to defending purely what is right and what is wrong.

2. “Appraisal Fraud” Well, according to the story over the last 10 years Walmart has had adjustments to their appraisals for almost 50% of their challenges. I’d say the “appraisal fraud” falls directly into the laps of the local governments not doing their job of creating the correct assessments. Otherwise why would they be adjusted?

3. Let me ask you… what deductions do you take on your income taxes every year? If you’re anything like the average american that list would include: mortage interest, property taxes, dependents, medical expenses etc. By your standards anyone LEGALLY DEDUCTING from the income taxes is guilty of “tax evasion” and everyone is paying higher taxes to make up for the average citizen “chiseling your county or your state” for including THOSE LEGAL deductions from the income taxes.

SDV comments, where fiction takes precedence over fact.

mary in
Thursday, October 18 at 08:15 AM

Mary in :Mary, I dont know about you,but the local ,state and federal government didnt provide me money to build the driveway into my home,pay for my sewer hookups,pay for my frontage fee to do it,allow me to continue to violate state,local and federal law by continously flooding my neighbors with impunity!Then, thats not enough largesse,Wartmart wants lowered assesments after milking all the welfare teats possible. There was a retraction in the Fort Worth Star Telegram in the last coupe of days regarding a slur on the Good Jobs First Study.The newspaper verified that the figures in the study were correct!The reasons many assessments arent challenged is because small governments fear the litigation costs are not worth the loss-Another intimidation tactic from your friendly Bullies from Bentonville.

ddrb in
Thursday, October 18 at 09:01 AM

I think that any community who considers any concessions to WalMart should lay out in advance a memo of understanding regarding assessment challenges.If WalMart bore the burden of the cost of ingress and egress lanes,sewer lines, utility construction costs upfront (many times these are paid for by local and state tax dollars),it would cost a hell of a lot more than lowering an assessment by a few thousand bucks!

ddrb in
Thursday, October 18 at 09:08 AM

P.S. I believe you’re a WalMart shill.

ddrb in
Thursday, October 18 at 09:14 AM

Well ddrb, what kind of monies do you provide to your local and statement governments so they would treat you with “freebies” of: driveway into your home, sewer hookups and frontage fees? Have you asked them to pay for them? Do you provide some type of incentive to them that they will not only recoup their investment but make additional $ on top of that?.... probably not WHICH IS COMPLETELY DIFFERENT than any business such as Target, Sears, Home Depot, Costco and even Walmart.

What you anti-Walmart “shills” keep forgetting is that it is the local governments that are granting these incentives… and it’s been going on FOR YEARS FOR MULTIPLE BUSINESSES NOT JUST WALMART. If it is such a bad idea then why do they continue to do it today????????? Either they were correct in granting the incentives or we have way too many idiots running our governments and it boils down to you the citizen who keeps voting them into office.

As for your idea of “laying out in advance a memo of understanding regarding assessment challenges"… I am quite sure those rules exist today FOR EVERYONE INCLUDING TARGET, SEARS, COSTCO, HOME DEPOT, ANY BUSINESS AND ANY PROPERTY OWNER.

You guys are drinking way too much of the koolaid with your conspiracy theories.

Mary in
Thursday, October 18 at 10:16 AM

P.S. By your own standards you, SDV and Ken V are all WMW “shills”. So how much do they pay you? I certainly hope it’s a living wage and not minimum wage, but then again with the crap you guys post for the money you do earn I think it’s a wasted investment just like this site.

Mary in
Thursday, October 18 at 10:20 AM

Mary,

You have to remember, ddrb has said in the past, that his whole government is crooked, now he is complaining that they aren’t getting enough revenue to be even more crooked!! I wonder exactly what HIS and SDV’s tax burden really is!! Also, does ddrb’s home bring in any sales tax money, or create jobs, which creates payroll taxes, to warrant any ‘breaks’? Sounds like he wants a share of the meat, without having to do any of the hunting!!

Truth is, he is just mad that they built a Wal-Mart in his neighborhood, it’s the old NIMBY thing!! BOO HOO!!

RDS in
Thursday, October 18 at 10:46 AM

What is it called when two shills get together.

JOE in
Thursday, October 18 at 11:01 AM

JOE:WalMart P.R.Firm

ddrb in
Thursday, October 18 at 11:10 AM

RDS:Ive corrected you on this one in the past,but if you cant even get my gender correct,how can anyone believe anything you say?ITS,M’AM TO YOU,RDS,NOT SIR!

ddrb in
Thursday, October 18 at 11:13 AM

“MARY” IN :SO I GUESS YOU DONT MIND WASTING YOUR TIME OR SOMEONE ELS’ES MONEY COMING TO THIS SITE!

ddrb in
Thursday, October 18 at 11:16 AM

Let us review, indeed. Consider it a quality check on “your own standards.”

#1 and #3 are basically the same Mary gasbag contrivance/excuse with the ‘its legal’ because ‘everybody does it, so that makes it right/moral and OK to cheat on your taxes’. Wrapped in the WalMart flag are these typical self justifications for business model stealing from the public treasury. Smoking, boozer retailing, snubbing your employees on health care ( yet taking out ‘dead peasant’ life insurance policies on them) and killing a couple of your customers are all ‘legal’ in WalMart’s avarice cult and propaganda defense logistics, so why not skimp as a tax dodging skinflint against your neighbors on behalf of the 5 Walton multibillionaires. This is consistently similar to WalMart’s ‘Let us tell you how much money we’re saving you as we drive your family to the welfare office’ PR hustle and chest thumping corporate egoism needing endless Edelman ‘war room’ concealments of the truth.

#2 Why has not WalMart challenge all the assessments if there is any truth to “local governments not doing their job of creating the correct assessments.” The truth is they are correct, WalMart is just a tax dodging con artist serving notice on county officials that WalMart is more interested in behaving like Leona Helmsly than to pony up their fair share. I can see the occasional mistake on a property tax bill, but this is very different from the Bentonville slobs in a systematic ‘love of money’ psychopath kind of way. It needs the morning devotional of Mary’s patriotism from the gutter of taxpaying anarchy and the despise your local government WalMart/Al Capone corporatism daily yodel for ‘economic freedom’ and billions annually in taxpayer subsidies.

WalMart- Our duty is to avaricious tax defeating scams and ‘legal chokeholds’ first, not some loyalty to paying our just dues to local police/fire/schools or infrastructure. As far as that “capitalism is best when it behaves itself” crap, WalMart says...you can all just go to hell in a Chinese made handbasket.

SanDiegoView in save on heating cost- burn more Ayn Rand books
Thursday, October 18 at 12:16 PM

Wow SDV, you sure do find ways to continously put your big old foot in your mouth.

1. Now this is quite simple to follow SDV.... How do you keep misconstruing “loophole” with “illegal”. WHAT IS ILLEGAL ABOUT IT??????????? They are following the tax code as it was written. Basically they are doing their job and handling their personal responsiblity to look out for their interests. I would expect nothing less from them or any other company or individual. If so many local and state governments are hot under the collar that they are using tax strategies to reduce their tax liabilities, only because the local and state governments were too stupid enough to create the rules, then the beef is with them.... THEY CREATED THE RULES!!!! **Note to local and state governments… If you don’t like how people are following your rules then change the rules!!!

2. I guess it never occured to you that maybe the government is wrong only 50% of the time. It’s just too easy to see that Walmart, and I’m sure a host of other companies and individuals, do a much better job of their homework then the local governments and know when something should be challenged.

SDV, where playing loosely facts, not using a brain and creating tall tales of conspiracy continues to show you how unknowlegable and dumb people calling themselves SanDiegeView can be.

Mary in
Thursday, October 18 at 12:34 PM

ddrb, so whose money am I wasting? And I wouldn’t classify pointing out the idiocy of posts like yours and SDVs a waste of “my time”. It’s purely pleasure on my part and that’s more than worth the time.

mary in
Thursday, October 18 at 12:37 PM

“Mary” in:Sadistic pleasure,no doubt.

ddrb in
Thursday, October 18 at 01:34 PM

ddrb, I’m sorry I hurt you feelings pointing out the obvious truth.

Mary in
Thursday, October 18 at 02:51 PM

“Mary” in: What is it when two shills get together??Shill schlock!

ddrb in
Thursday, October 18 at 02:52 PM

Mary,

Funny, how these people think “Legal’ means “Illegal” and being dillegent in making sure you pay ONLY the taxes which are owed, is somehow WRONG!! ddrb, even stated that her local officals are ALL crooked, yet doubts that their tax assessments may be wrong!! Just pay whatever they ‘say’ you owe and shut up, is their motto!!

ddrb,

“What is it when two shills get together??Shill schlock!”

That goes for WMW shills as well, (you and SDV)!!

“SO I GUESS YOU DONT MIND WASTING YOUR TIME OR SOMEONE ELS’ES MONEY COMING TO THIS SITE!”

And, you don’t seem to waste YOUR time and the union members money, either, now do you?

RDS in
Thursday, October 18 at 05:36 PM

RDS:Get a spell checker-like you told me-"It might make people think less of you for incorrect spelling.” I think you wanted to say “diligent”.On second thought,it’ll take more than a spell checker.

ddrb in
Thursday, October 18 at 09:54 PM

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