Indiana Lawmakers Developing Solution To Big Box Store Property Taxes

INDIANAPOLIS -- Lawmakers have developed what they hope is a solution to growing concerns over property tax bills for big box stores like Walmart, Meijer and Walgreens.  But, groups on both sides of the issue say they won’t know the effect of that solution until after the General Assembly’s session ends.

Counties across Indiana are losing money as property tax assessments shrink for big box stores. Property taxes for these national chains went down after a number of court rulings said they could determine their tax bill by comparing an individual store to any other store in a general retail market.  Critics have argued this is an apples-to-oranges comparison. 

A new House bill seeks to change that broad comparison by using what’s called market segmentation.  Indiana Association of Counties lobbyist Ryan Hoff says using market segmentation could push assessors to consider a number of factors.

“Who are the likely users, similar property, what is the traffic on the road outside of it, what is the income of the population surrounding a store,” Hoff said.

But there’s no strict definition for what market segmentation means, and the bill doesn’t specify which factors should be weighed. It leaves that job to Indiana’s Department of Local Government Finance.

Indiana Chamber of Commerce Vice President Bill Waltz says, if the bill is passed, it will be a long process with most of the important details determined, first, by the DLGF, and then the tax courts.

“Frankly, I’m not sure anybody knows exactly what it means but we’re willing to see how it works out,” Waltz said.

A Senate committee approved its version of big box assessment legislation Tuesday.  A House committee will consider its own bill later this week.