Story originally printed in the Coulee News or online at www.couleenews.com
Published - Wednesday, July 09, 2008
Wisconsin high court backs Walgreens on property taxes
The Wisconsin Supreme Court sided Tuesday with the national store chain Walgreens in a property tax dispute that has statewide implications.
The court struck down a common assessment practice and said the city of Madison has been charging two Walgreens stores too much in property taxes.
Walgreen Co. has challenged assessment methods in two dozen communities, including La Crosse, that had based valuations on the above-market-rate leases the chain enters into rather than the lower open market rent.
The high court agreed that Madison improperly valued the stores based on the rent Walgreens pays to lease the property rather than fair market value.
La Crosse Assessor Mark Schlafer has said it’s common practice for assessors to take into account more than the brick and mortar of a building.
He said Tuesday he was surprised — “along with dozens of assessors who thought they were assessing the properties properly” — by the court’s decision to overturn the circuit and appellate courts.
There likely will be refunds to Walgreen Co., Schlafer said.
Though the Walgreens on La Crosse’s North Side was sold in 2005 for more than $4.5 million, Walgreens claims the fair market value for both is no more than $2.2 million and the assessed value is no more than $1,989,020.
The 2007 valuations for the North and South Side Walgreens stores were $3 million and $2.9 million, respectively.
The Deerfield, Ill.-based retailer says its two La Crosse properties were overvalued by almost $2 million combined.
Taxes on the 2626 Rose St. store were $85,539.80 and $80,632.30 on the 900 West Ave. shop.
Walgreen enters into long-term leases with higher than market rate rents. And while the drugstore chain doesn’t own the properties, it does pay the property tax bills.
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