February 19, 2019
Walmart seeking rollback on Warrenton store taxes
Walmart’s lawsuit seeks county tax refunds totaling $344,000 over the last four years.
The Walmart theory is somewhat of a new one. They’re doing it across the country.
— Fauquier County Attorney Kevin Burke
The world’s largest retailer claims it pays too much in Fauquier County taxes.
Walmart recently filed a lawsuit challenging its Warrenton store’s real estate tax assessment and seeking a refund of more than $344,000, plus interest.
The county’s assessment company values the big box store and 21-acre site at $15.5 million.
But, Walmart contends the property has a total value of $6.9 million, according to an 11-page suit its lawyers filed Dec. 26 in Fauquier County Circuit Court.
The company pays more than $152,000 a year in county real estate taxes.
Walmart contends it should pay just $68,000 a year.
The Wal-Mart Real Estate Business Trust, which owns the store, appealed its 2018 assessment — conducted by Wampler Eanes Appraisal Group Ltd. of Daleville — to the Fauquier County Board of Equalization. The board denied the appeal.
The county and the board “committed manifest error by failing to apply generally accepted appraisal practices,” Washington, D.C., lawyer Ilene Boorman wrote in the lawsuit.
Walmart deems the appraisal “invalid or illegal, valuing the property using the cost approach to value, even though the improvements on the property were built in 1999 and were too old for valuation using the cost approach,” according to its lawsuit.
In other words, the value of the building should decline with age and dwindling demand for huge stores, the company contends.
Its lawsuit challenges the $15-million-plus assessments in four years, 2015-18.
Walmart and other big-box retailers have used the same strategy to cut local tax bills across the nation, according to a recent New York Times story.
In part, the big retailers contend little market exists for vacant, “dark stores” that have grown in number, reducing the value of still-active buildings.
“We’ve had plenty of challenges to assessments,” County Attorney Kevin Burke said. “The Walmart theory is somewhat of a new one. They’re doing it across the country.”
Walmart’s attorney, Ms. Boorman said by email: “I am not authorized to speak to the press on Walmart’s behalf. It would be best if you contacted their media relations team.”
In the suit, the company seeks to lower its property assessment and to receive tax refunds averaging $86,000 annually over four years. It also seeks 10-percent annual interest, the same the county charges for unpaid tax bills.
The statute of limitations allows taxpayers to challenge assessments going back no more than four years, according to Mr. Burke.
The county’s Walmart assessments have consistently exceeded $15 million, going back at least seven years, according to real estate records.
Although Walmart filed its suit about seven weeks ago, it has yet to formally “serve” the county, which would trigger the need for Fauquier to respond. Thus, the court so far has scheduled no action on the lawsuit.
Fauquier County reassesses real estate once every four years.
The Town of Warrenton also taxes the Walmart property. The company pays about $7,750 a year to the town, with a tax rate of just 5 cents per $100 assessed value.
The Warrenton Walmart does more than $33 million in grocery sales to lead the Fauquier market. Information about the rest of the huge store’s sales remains unavailable to the public.
The world’s largest retailer, Walmart rang up 2018 global sales of $495.76 billion — more than three times that of Amazon, according to the National Retail Federation.
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kilsteini · February 27, 2019 at 8:18 am
JDwarrenton · February 22, 2019 at 5:45 pm
Let's see. Walmart property and shuttered Sears Property are both assessed for around $100 per foot of floor space. It will cost $1.8 million to renovate 22,600 SF for a new tenant, or around $80 a foot. Plus, RE commissions, and lost rent. The other vacant 80,000+/- SF in the Sears building will need similar refit / expense, plus commissions and lost rent until lease up.
So how much is the Walmart property worth vis-a-vis the Sears?
Tony Bentley · February 22, 2019 at 9:39 am
You know what they say about an old dog nonewtaxes......
Truepat · February 22, 2019 at 6:27 am
Vote for change......
nonewtaxes · February 21, 2019 at 11:54 pm
Yeah mh lets have the county pay to assess each house every couple of years. That'll help add another 10% to taxes. The county infers market value by assuming your house is average.
nonewtaxes · February 21, 2019 at 11:49 pm
TB (Tony Backwards) I aint all about spending other peoples money. I am all about other people spending my money.
The example with the car was to show the difference between people having an expense and business having a depreciation. While depreciation is an expense it is a non cash expense so depreciation increases free cash flow. For a personal you dont get to depreciate it on your taxes.
BTW, the averag length of car life is about 8 years. Ifn you can keep yours longer good for you. But Im not clear why you keeping you cars longer changes the lesson via the example. Please explain the relevance of 10 year or 8 year or 25 year car life and how it applies to the example illustrating the difference between a persoanl asset and a business asset.
Mark House · February 21, 2019 at 5:20 pm
JDwarrenton - Thank you for the VA Supreme Court definition of fair market value. VA State Law about fair market value forgets an important aspect of the property value, in my mind, the county assessments are based on the appearance of the exterior of the house (buildings) and the description of the property on the deed (acreage and size of house, buildings,etc) but it does not cover the appearance of the interior.
Say a house is assessed at $200,000 by an assessor, but when a potential buyer walks in the house and see antiquated plumbing, wiring, fixtures, etc. they aren't going to pay the "fair market value", they will walk away unless the price is dropped. Wouldn't an owner need to have both an assessment and an interior inspection to obtain the true "fair market value" of their property?
The assessor thought we had a 1500 sq ft finished basement by outside appearances, when we in fact have a 500 sq ft unfinished basement with crawl spaces. We took photos of the basement and appealed our assessment.
JDwarrenton · February 21, 2019 at 8:21 am
The Virginia Supreme Court has provided the following definition of fair market value:
Per VA Supreme Court: "The fair market value of a property is the price which it will bring when it is offered for sale by one who desires, but is not obliged to sell it, and is bought by one who is under no necessity of having it." There is no mention of "use". In fact, "value-in-use" is an entirely different matter, and may or may not (likely not) represent market value.
Virginia State law requires that assessments be at 100% of fair market value, equitable and uniform across the same class of property.
Tom LaHaye · February 20, 2019 at 8:44 pm
Hmmm, built in 1999? Sure, and expanded and completely renovated when, 2012 or 2013? The Big Box stores like the "Dark Store" argument, but "Fair Value in Use" is another common appraisal method. I wonder how WalMart values that parcel when they want to borrow money.
WalMart likes to use failed/abandoned stores as comparables in their estimates of value. Stores, even Big Box stores like WalMart fail for a variety of reasons. Does it look like our WalMart is failing? Would they have invested millions recently if it were? They also like to point to competition from Internet retailers, yet they are installing Kiosks in their stores to deliver Internet purchases in their stores; like Home Depot, their brick and mortar presence is an important part of the Internet strategy.
Finally, the BOE did not deny WalMart's appeal.
vipermike98 · February 20, 2019 at 8:15 pm
This is why you need competent people working county jobs. Accurate tax assessments MUST be recorded.
Give Wal-Mart their money back.
Tony Bentley · February 20, 2019 at 3:24 pm
nonewtaxes - you are all about spending other peoples' money. We have two vehicles, a 1999 and a 2003. Both run like champs, look good because we maintain them, paid for, low on taxes, low on insurance, why would we "junk" them. That's wasteful! 70 million people are now more then 90 days behind on their vehicle payments, so much for dumping a car because it's "old". You put your folks in the nursing home yet?
How do you know that building more rentals will bring the rents down? Those builders still have a loan to pay off, and they are going to charge what the market will bear. Remember how all the selling prices for house went up before 2008, then boom the housing bubble burst. Prices went back down to more sensible levels. People are doing more ONLINE shopping, banking, etc. Look around you, what businesses are now closed? Little niche stores will stay open as long as they stay small, and cater to tourists, retirees, and the wealthy.
JDwarrenton · February 20, 2019 at 12:37 pm
BOE was a joke. They did not even understand the basic construct of "equalization" as stipulated in the state statutes as regards property assessments. When the data was put before them, they dismissed it. The Realtors on the BOE seemed most dismissive, and committed to holding assessments up, especially on residential properties in neighborhoods they held listings in!
Truepat · February 20, 2019 at 12:19 pm
Mark House - I believe you, it's apparent downtown Warrenton invisions itself as a "boutique mini-Georgetown" but in doing so they are not catering to the majority of prospective customers. Perhaps the high costs are due to high rents but regardless they are driving the young and average customers to places like Gainesville. There are choices for all budgets there and they have anchor businesses such as the theater, and major retailers to draw the customers in. I personally have to go to Woodbridge to Sams club. Do I want it in New Baltimore or other resdential areas? No, The planning commission should have made the Home Depot/Walmart area a big box store area. The outlook is bleak for homeowners being taxed out of owning there houses if the trend is not changed.
nonewtaxes · February 20, 2019 at 10:12 am
business assets aint like personal assets. You buy a car and lose value through depreciation and after 20 years you junk the thing cause it aint no good no more. A business buys a car and it depreciations and they write that depreciation off against their income. It how asets move from teh balance sheet to the income statement. Its why walmart can depreciate the store but you cant your house.
if rents are high thats a reason to build more rentals. why would you ever build if rents were low?
Mark House · February 20, 2019 at 9:27 am
Truepat - I've talked to a few business owners in Old Towne and in the other shopping centers. The amount of money that the companies or individuals that own the buildings charge very high rents. That is why I think it is not feasible or smart to build more shopping spaces along Walker Drive on the Forsten property.
Truepat · February 20, 2019 at 6:20 am
With all the vacant buildings in and around Warrenton and personally being charged outrageous taxes as an investor (property owner) in Fauquier county, it is apparent leadership is failing on business health as well as using "tax" as an answer to poor financial uses of the taxes they collect.....
Mark House · February 19, 2019 at 5:30 pm
Agree with Silii - If this is allowed to fly I want an reassessment on my property. "In other words, the value of the building should decline with age......, the company contends." Our house is 55 years old, it's not getting newer.
Silii · February 19, 2019 at 4:39 pm
Ha. Walmart isn't the only entity completely worked over by the BOE. Hundreds of homeowners also found out what a pitiful, incompetent, rude group the BOE was this year. None of them even bothered to look at information submitted by homeowners, according to the rules, prior to hearings. What a joke, and what a diss to taxpayers.
nonewtaxes · February 19, 2019 at 3:42 pm
Savefauquiercounty2019 · February 19, 2019 at 3:31 pm
Dear Walmart, our teachers have not been compensated in years. Teachers shop at Wal-Mart. Teachers are suppose to be valued. They are probably your best customers. Please pay your fair share to help Fauquier County. Also, make a huge donation to Fauquier County schools. You money is sorely needed. Donate to our schools on an annual basis. Schools with educated, talented teachers produce employees. Be an example. Give to this community in a huge way.
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