Walmart and its affiliates are taking legal action against dozens of Colorado counties. It's part of a larger trend as big-box businesses try to lower their tax bills and it has local governments worried.
In September, Walmart sued rural La Plata County over a roughly $20,000 tax bill. It was a figure that surprised county commissioner Julie Westendorff.
"We're really not accustomed to having worldwide corporations suing us, and $20,000 certainly doesn't seem to be a large amount of money, or even worth the fight, from their perspective," she said.
After all, Walmart had $514 billion in revenue in the last fiscal year. But the La Plata lawsuit wasn't an anomaly. It was part of a wave of legal action that could affect 32 counties across Colorado. The Durango Herald first reported the lawsuits.
Basically, the retail giant wants to lower its property tax bills for stores and distribution centers from Denver to Durango. Those challenges could affect millions in government revenue when it's all combined.
Now, it's not unusual for big businesses to challenge their county tax bills. But Walmart's reasoning is especially interesting.
They blame Amazon.
Walmart says that online retailers are killing off other big-box stores in "overwhelming" numbers. For example, there are only two Kmart stores left in the entire state, and one of them will soon close.
Now, to be clear, Walmart itself is doing OK. The company has boosted online sales by 41 percent in the last year, according to the Wall Street Journal, and its overall sales are on a long growth streak.
But the company still says its property taxes should shrink.
Most of the Colorado lawsuits are about annual taxes on personal property, things like the stores' forklifts and shelving. Walmart also wants lower taxes on land and buildings in Arapahoe, Weld and Teller counties for the current tax year.
The company argues that when a competitor like Kmart closes, its property is sold on the cheap and lowers the value of Walmart's stuff. Lower values mean lower taxes.
"This trend has taken firm hold in Colorado," the company claims in legal documents. Or even across the entire country. Retail giants have embraced "dark store" theory nationwide, using the death of competitors to lower their own bills, as CityLab reported.
In La Plata County, the assessor's staff had already lowered the value of the store's "business personal" in the current assessments. But Walmart said it should have been a bigger drop, so they challenged the numbers. When they were denied, they escalated to a lawsuit in district court.
Carrie Woodson, the assessor for La Plata County, is frustrated. Her office is always willing to consider taxpayers' evidence, but the company hasn't detailed its case, she said. It's presenting nearly carbon-copy arguments to each county.
"It is a little frustrating that they're not giving us anything to go on," Woodson said. "So, there's even no way to negotiate with them if they don't show us how and why they're depreciating this personal property."
In other cases, Walmart has demanded sharp reductions. For a store in Thornton, the company is asking for a 74 percent reduction from the 2018 assessed value of its equipment, according to appeal documents.
A manager for the company also argued in that case that Walmart's stuff wears out quickly due to its 24-hour operations. A state board rejected that argument.
Now, the Adams County case is heading to the Colorado Court of Appeals. Its outcome could affect some of the company's fights with other governments around the state. But other lawsuits, like La Plata's, will continue in lower courts.
County leaders are especially concerned. While the sums aren't always huge, these legal fights could chip away at government revenues.
"Unlike municipalities who have other ways of funding themselves, counties are almost exclusively funded by property tax," said John Swartout, executive director of Colorado Counties, Inc. "And so, property tax issues are critical issues for counties."
The company told CPR that it's only following the law, which allows all property owners to challenge assessments.
"We are simply seeking a fair market value for the taxation of our property, just as any other taxpayer should expect under state laws," wrote Tiffany Wilson, director of communications, in an email to CPR.
But to Commissioner Westendorff, Walmart isn't a typical taxpayer.
She thinks the superstore has helped Durango with affordable goods. But she says the county supports Walmart's lower-paid workers with public services — services paid for by taxes.
"Any community a Walmart is in is providing services to the company and to its employees and to its customers," she said. "And to nickel and dime over $20,000, it seems like they could spend their money better elsewhere."
County governments affected by this latest wave of lawsuits will likely work together to defend themselves, according to Woodson.
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