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For any who can't view it directly, some pertinent excerpts: (bolding mine)
With astonishing range and rapidity, big-box retailers and corporate giants are using an aggressive legal tactic to shrink their property tax bills, a strategy that is costing local governments and school districts around the country hundreds of millions of dollars in lost revenue. These businesses — many of them brick-and-mortar stores like Walmart, Home Depot, Target, Kohl’s, Menards and Walgreens that have faced fierce online competition — maintain that no matter how valuable a thriving store is to its current owner, these warehouse-type structures are not worth much to anyone else.
So the best way to appraise their property, they contend in their tax appeals, is to look at the sale prices on the open market of vacant or formerly vacant shells in other places. As shuttered stores spread across the landscape, their argument has resonated.
To municipalities, these appeals amount to a far-fetched tax dodge that allows corporations to wriggle out of paying their fair share.
Either way, homeowners and small businesses will have to pay more or live with smaller budgets for police, schools, garbage pickup and road repair.
“The potential for a domino effect of property tax appeals across the commercial and industrial portions of the tax base, which, were it to occur, could have a much more profound effect on some governments’ ability to levy” property taxes,” S&P Global Ratings concluded in a report last year. For a smaller town or school district, “the financial impact could be devastating,” said Scott Nees, a co-author of the report, noting that it could also threaten localities’ ability to borrow money.
Granted that most of the example locations cited in the article are not comparable to Long Island's current high-retail economy, there's no reason why the Big Box stores wouldn't try this here -- and plenty of reasons why they would.
Look at this list of chains that have shuttered stores just this past year (2018). Every one of them, with the possible exception of Bon-Ton which I've never heard of, has stores on Long Island and could conceivably use the cited argument to "grieve" their commercial property taxes. If successful that would theoretically bump our already onerous residential tax base even higher and -- theoretically -- make it impossible for Towns to adhere to the 2% cap when budgeting for services.
The presence of a high percentage of commercial properties has been one factor keeping property tax rates in some LI districts lower in comparison to all- or mostly-residential districts. But if big-box type retailers succeed in this tactic, those areas would see the most dramatic increases for sure.
Thoughts on the likelihood of the tactic being successful on Long Island?
For any who can't view it directly, some pertinent excerpts: (bolding mine)
With astonishing range and rapidity, big-box retailers and corporate giants are using an aggressive legal tactic to shrink their property tax bills, a strategy that is costing local governments and school districts around the country hundreds of millions of dollars in lost revenue. These businesses — many of them brick-and-mortar stores like Walmart, Home Depot, Target, Kohl’s, Menards and Walgreens that have faced fierce online competition — maintain that no matter how valuable a thriving store is to its current owner, these warehouse-type structures are not worth much to anyone else.
So the best way to appraise their property, they contend in their tax appeals, is to look at the sale prices on the open market of vacant or formerly vacant shells in other places. As shuttered stores spread across the landscape, their argument has resonated.
To municipalities, these appeals amount to a far-fetched tax dodge that allows corporations to wriggle out of paying their fair share.
Either way, homeowners and small businesses will have to pay more or live with smaller budgets for police, schools, garbage pickup and road repair.
“The potential for a domino effect of property tax appeals across the commercial and industrial portions of the tax base, which, were it to occur, could have a much more profound effect on some governments’ ability to levy” property taxes,” S&P Global Ratings concluded in a report last year. For a smaller town or school district, “the financial impact could be devastating,” said Scott Nees, a co-author of the report, noting that it could also threaten localities’ ability to borrow money.
Granted that most of the example locations cited in the article are not comparable to Long Island's current high-retail economy, there's no reason why the Big Box stores wouldn't try this here -- and plenty of reasons why they would.
Look at this list of chains that have shuttered stores just this past year (2018). Every one of them, with the possible exception of Bon-Ton which I've never heard of, has stores on Long Island and could conceivably use the cited argument to "grieve" their commercial property taxes. If successful that would theoretically bump our already onerous residential tax base even higher and -- theoretically -- make it impossible for Towns to adhere to the 2% cap when budgeting for services.
The presence of a high percentage of commercial properties has been one factor keeping property tax rates in some LI districts lower in comparison to all- or mostly-residential districts. But if big-box type retailers succeed in this tactic, those areas would see the most dramatic increases for sure.
Thoughts on the likelihood of the tactic being successful on Long Island?
“Either way, homeowners and small businesses will have to pay more or live with smaller budgets for police, schools, garbage pickup and road repair.”
The cost is ALWAYS be passed along to the property tax owner. God for bid we don’t pass a school budget or do with less.
The tax bill is/will always be passed along to the workers. Thousands of (low paying) jobs paying their share of taxes to offset the tax breaks for these box stores.
What’s the answer? Tax them to death so they leave the USA or give them tax breaks to employ thousands of workers who in return pay taxes & make up the difference?
What’s the answer? Tax them to death so they leave the USA or give them tax breaks to employ thousands of workers who in return pay taxes & make up the difference?
^^^This is the answer^^^
How it affects LI residential property taxes...remains to be seen.
How it affects LI residential property taxes...remains to be seen.
True. However, every piece of land these days is being developed with apartment complexes, condos or senior living centers. I understand that commercial & residential property is totally different.
True. However, every piece of land these days is being developed with apartment complexes, condos or senior living centers. I understand that commercial & residential property is totally different.
The article made the point that the difference created by commercial property tax reductions is borne by residential property owners...Nassau is re-assessing everything, should be interesting. My old, freshly grieved house went up a projected $2K....I'm sure my buyers were thrilled....
The article made the point that the difference created by commercial property tax reductions is borne by residential property owners...Nassau is re-assessing everything, should be interesting. My old, freshly grieved house went up a projected $2K....I'm sure my buyers were thrilled....
Yes, as previously posted, my sisters house in S. Farmingdale (Nassau) went up 2k
14k to 16k for a BASIC 1500 sf split.
The problem isn’t businesses trying to lower their taxes but that the taxes are increasingly high.
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