Despite Target’s worse-than-expected third-quarter earnings, due in part to losing customers to Wal-Mart in a depressed economy, they have found several ways to stick it to the world’s largest retailer.  Other than pledging a ‘price-war’ against them, they are also hitting Wal-Mart where it counts: Bentonville.  Construction is nearing completion and signage is erected at Target’s newest location: Bentonville, Arkansas, Wal-Mart’s home when not in vacationing in China. 

Slated to open in March, the store will be located on the east side of I-540.  Jenn Glass, a Target representative was quoted in the Benton Daily Record (Arkansas):

“Target opens new stores in October, July and March of each year,” said Jenn Glass, Target representative. “We’re projecting a March 8, 2009, opening in Rogers. “According to Glass, the Rogers location will be a traditional Target retail store, not a Super Target. The Minneapolis-based retailer has 70 new stores scheduled to open in the United States in 2009.

Not to be outdone, Wal-Mart plans to open a Neighborhood Market DIRECTLY across from the new Target, in an awkward, immodest attempt to keep the citizens of Bentonville shopping at the “right store.” Wal-Mart doesn’t typically open Neighborhood Markets as frequently as they used to, and seem to be making every attempt to upgrade all of their regular stores to Supercenters.  Way to keep the gloves on, guys.

Target set to open in March [Benton County Daily Record (Ark.)]

ROGERS - Target Corp. ‘s red bull’s-eye is hardly a household trademark in Benton County. For years, the nearest Target store has been in Fayetteville, in neighboring Washington County. But the bull’seye has been shining brightly along Interstate 540, in the shadows of the Pinnacle Hills Promenade, for the past couple of weeks.

Crossland Construction crews continue to erect Benton County’s first Target store, situated across the street from the Pinnacle Hills Promenade, along the east side of I-540. The exterior of the 127, 000-squarefoot Target store is nearing completion, the signage has been erected, and the parking lot has been paved. But for those who are planning to get some holiday shopping done at the Minneapolis-based retailer, it’s still going to require a drive to Fayetteville this winter.

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This comes courtesty of Writing on the Wal. We’ve issued reports on Wal-Mart’s use of various tax schemes, including captive REITs, 80/20 companies, and captive employee leasing companies. All of these strategies have been used in the name of avoiding paying state corporate income tax. Now, one website has gone ahead and documented some additional tax issues, these of the unpaid variety.

Below are examples of tax liens placed on Wal-Mart, ranging from $104 to, well, a whole lot more. Liens are granted after notices have been sent to a debtor but the owed taxes remain unpaid. Its nice to know that, in addition to not paying taxes, Wal-Mart forces states to spend MORE money just to collect these debts. YAY!

EXAMPLE ONE:

Debtor Information
Name: WAL MART STORES INC
Tax ID: 710415188
Address: 702 SW 8TH ST
BENTONVILLE, AR 72716-6209
BENTON COUNTY

Creditor Information
Name: SC DEPT OF REVENUE

Filing Information
Filing State: SOUTH CAROLINA
Original Filing Date: 1/17/2003
Amount: $2,463,114
Release Date: 1/28/2003

Filing 1
Filing Number: 50458809
Filing Court: GREENVILLE COUNTY RECORDER
Filing County: GREENVILLE

EXAMPLE TWO:

Debtor Information
Name: WAL MART STORES INCORPORATED
Tax ID: 710415188
Address: 702 SW 8TH ST
BENTONVILLE, AR 72716-6209
BENTON COUNTY

Creditor Information
Name: STATE OF INDIANA

Filing Information
Filing State: INDIANA
Original Filing Date: 4/15/2008
Amount: $1,600,933
Release Date: 6/13/2008

Filing 1
Filing Number: 06819151
Filing Type: STATE TAX WARRANT
Filing Court: MARION COUNTY CIRCUIT COURT
Filing County: MARION

Read on for more!
Wal-Mart: Examine the history of the tax liens in the millions

The collection is from an undisclosed company - unnamed because of state tax confidentiality laws.

The REIT loophole issue, which focuses on the use of captive real estate investment trusts to avoid paying state corporate income taxes, has been in the national spotlight for going on two years now. In North Carolina, Wal-Mart saved millions of dollars in state tax bills by essentially transferring its properties to its own REIT and paying rent to itself, then writing it off as a tax deduction. These transactions were frequently followed by rather suspicious looking characters in black masks trudging back to Bentonville with big old gobs of money that could have gone to funding state programs.

North Carolina got wise to the scheme and assessed Wal-Mart for back taxes. Additional states have sought ways to close the loophole up, either through attacking it directly or by adopting combined reporting. Maryland is one of those states - last year Maryland Comptroller Peter Franchot announced that his state would no longer allow payments to captive REITs to be deducted from state tax returns. Now following its first publicized audit since then, Maryland will receive $10.8 million in back taxes for a 3-year period from the unnamed company.

We’ve chronicled again and again that Wal-Mart is one of the worst offenders in this area. Simply closing the loophole is one way to fix it. Adopting combined reporting is another. At least in Maryland’s case, the effort has already resulted in nearly $11 million coming back into the state treasury.

Maryland collects millions after closing tax loophole [Washington Post]

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WAL-MART AND THE ‘POORING OF AMERICA’
I’m not sure where the phrase “Pooring of America” came from, but it’s perfect to explain Wal-Mart’s effect on working families. Seeking Alpha ponders why Wal-Mart and McDonald’s are doing so well right now.

What are McDonald’s and Wal-Mart Telling Us? [Seeking Alpha]

I am very intriqued by our top 2 choices for the “Pooring of America” trend - Walmart (WMT) and McDonalds (MCD) - what exactly are the charts above telling us?  If we are to enter a long drawn-out recession, which I have believed, these seem to be screaming buys here. The only question is credit - how does a lack of credit potentially hurt both. They are not expanding a ton, in the U.S. at least - perhaps with Wal-mart it’s financing of inventory, but I cannot wrap my mind around this behavior.

Wal-Mart gets downgraded while stock up in 2008 amid the turmoil [BloggingStocks]

Will Wal-Mart weather the storm? To a point, it already is. Sure, all retailers are expected to have a dismal holiday season this winter, but Wal-Mart will do better than the competition. It has more stores, more pricing leverage and more wherewithal to hold customers hostage with lower prices and inventory turns at a time when it’s needed most. Perhaps we’ll see WMT return to the $60/share level by Thanksgiving—if not sooner.

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