Customers walk into Walmart in Scarborough in March. Large retailers have succeeded in lowering the valuation of their properties by more than $16 million since 2015. Brianna Soukup/Staff Photographer

A state board has rejected Walmart’s attempt to avoid hundreds of thousands of dollars in property taxes for its store in Thomaston, in a case that tested an argument by big-box chains that claim their stores’ value should be treated like that of a building for sale, not an active business.

The Maine Board of Property Tax Review case covered Walmart’s appeals of the 2017 and 2018 valuations of its Thomaston store. Many other similar appeals – for Walmart and other chains, and for stores in Thomaston and other towns – are still in the board’s lengthy queue.

Reporting by The Maine Monitor in February found that large retail chains have used the so-called “dark store” theory to attempt to lower their tax liabilities by about $16 million across the state since 2015.

In the 2017-18 case, as in those pending for every year since, Walmart disputed Thomaston’s assessment that its Supercenter there was worth about $15.8 million for property tax purposes. The company’s own assessment put the store’s value at closer to $7.4 million.

If upheld by the state, the lower assessment would have required Thomaston to rebate roughly $170,000 in taxes to Walmart for each affected year – about 2% of the town’s total property tax revenue, according to its financial records. The total revenue for the retail giant in fiscal 2022 was $572 billion.

“Walmart is a responsible taxpayer, and our property should be valued just like everyone else’s,” said Marci Burks, the director of corporate affairs at Walmart, in an email. “When we get a property tax bill, it should reflect the value of the land, brick, and mortar rather than the value of our business operations. We disagree with the decision and are considering our options, including an appeal.”


The tax review board includes attorneys, engineers, assessors, realtors and members of the public; one of each joins a panel to hear each case. The Walmart appeals were one of the first cases they heard since the pandemic; new staff members who began late this year, funded by the latest state budget, are tasked with getting the board’s work up to speed.

Board members declined to comment on the Walmart ruling, with a written order pending.


The hearings spanned more than three days beginning in August and continuing this week. Presenting financial charts on poster boards that compared various Walmarts in the area, lawyers for the company and the town of Thomaston sifted through thousands of pages of documents, grilled consultants on different versions of the store’s valuation and haggled about acceptable appraisal methods.

Walmart’s lawyers tried to downplay the relevance of “dark store theory” to the case, which they said is also sometimes called “second generation theory.”

“It’s being read that what we are asking the board to do today is assume that Walmart has decided that they are going to close their store, and what is that property worth after that?” Walmart attorney James Ryan said in August. “It’s a sweeping generalization.”


Thomaston attorney Paul Gibbons called Walmart’s methods for valuing the store illegal and unconstitutional. “They may not call it ‘dark store theory,’” he said in August, “but I will show that what they’re doing is simply wrong.”

Ryan argued the Thomaston store’s appraisal should be solely based on the property’s potential, or lack thereof, to be sold to a new, similar occupant, such as BJ’s or Target. It was not relevant, he said, whether the building currently housed a “thriving business.”

“This is not an instance where we should be finding value in use,” Ryan said Thursday. “It should be valued in (terms of) what are participants in the real estate market concerned about?”

Asked by the board about deed restrictions Walmart often puts in place to prevent its properties from being used by similar chains, Walmart appraiser Greg Curtis said those are typically imposed when the building is sold, and so aren’t in place now, and were not part of his analysis.

Ryan elicited the board’s skepticism by saying Thomaston had a seasonal economy and other down sides that made it unattractive for other big box chains. He argued this inflicted “functional obsolescence” on the Thomaston Walmart, slashing its value almost as soon as it was built.

This is a fundamental tenet of “dark store theory.” Gibbons dismissed it as wholly unreasonable.


“They’re saying that when they built this building, they lost $10 million three years later because the income wouldn’t support it. That’s an incredible thing to accept,” Gibbons said Thursday. “Reasonable people wouldn’t accept it on its face that a company as sophisticated as Walmart would build something and lose $10 million three years later.”


In relatively brief deliberations Thursday, board members determined that Walmart had not met its burden of proof to show that Thomaston’s assessment of the store was “manifestly wrong,” which is the legal standard in cases like this.

“If you build a store and it’s for your business practices, it doesn’t mean you don’t owe money on the things you’ve built,” said board member Amy Saxton, a real estate agent from Harpswell, during deliberations. “I was really bothered, too, by the functional obsolescence (idea) because I just think that’s crazy. The fact that you can do retail there is because of its location, which is not a saturated market, which is not full of shuttered places – it’s a vibrant community area.”

Board member Kerry Leichtman, the assessor for Camden and Rockport, did not find Walmart’s argument credible in part because it mischaracterized Thomaston, both by calling the midcoast, Knox County town a part of northern Maine and by comparing it to the Bangor metropolitan area.

“It’s setting the stage for a depressed economic environment that doesn’t exist in the Thomaston area,” Leichtman said. “I’m thinking through everything we’ve heard … that if Walmart was to vacate this building, that we’d probably have a Target in Thomaston within a few months and they’d be happy to pay.”


Other board members agreed that the degree to which Walmart argued the store had decreased in value – a cut of almost 60% – was “hard to swallow,” as public member Stan Piecuch put it.

The group voted unanimously to deny Walmart’s appeals for 2017 and 2018. A written order is pending. But so are numerous cases almost identical to this one, or based on similar concepts, which now face an uncertain fate in light of the potential precedent set this week.

Thomaston’s assessor, Dave Martucci, said this ruling is just one step in a long, ongoing fight.

“The impact is that we (the town) don’t have to rebate any tax money going back to 2017. We still have 2019, 2020, 2021, 2022 – and most likely by then it will be 2023 and 2024 – to deal with,” Martucci said after the hearing. “My guess is if they (Walmart) want to go forward, they’re going to have to get some new appraisals done, but I don’t know.”

This story was originally published by The Maine Monitor, a nonprofit and nonpartisan news organization. To get regular coverage from the Monitor, sign up for a free Monitor newsletter here.

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