Pulaski County Judge Barry Hyde on Wednesday rejected Walmart’s bid to cut its Pulaski County property tax assessments by nearly half, finding in part that the company’s appraisal reports were “fundamentally flawed.”
Directly at stake in the case is about $4.5 million in tax revenue for school districts and local governments in the county. But Walmart’s appeal has drawn attention from local government officials throughout Arkansas, who view it as the first serious test of the so-called dark-story theory in Arkansas.
Hyde, who is not a licensed attorney, acts as the county court judge in property tax appeals. He presided over a two-day hearing last month in Quorum Court.
The private appraiser hired by Walmart faced questions during the hearing about steps he took to investigate land sales used to come up with data points comparable to the company’s properties. Hyde ruled that the testimony “demonstrated [a] lack of investigation into the appropriateness of some of the comparable sales used.”
Observers for weeks have said that both Walmart and Pulaski County have prepared as if the decision will be appealed to Circuit Court and ultimately the state Supreme Court.
If the theory prevails in Arkansas, one assessor has warned that more than $100 million in tax revenue could be at stake.
Walmart and other big-box retailers have advanced the “dark store” legal argument in other states, to mixed success.
It holds that such stores should be valued, for tax purposes, as if they are closed and vacant because the buildings are so customized to their own needs that the buildings cannot fetch a price on the open market that compares to assessed values.
The 10 properties at the heart of the case include eight supercenters and two Sam’s Club stores that Pulaski County assessed at a combined $145 million.
Walmart Inc. first petitioned to lower the assessments to $93.4 million total. It later sought a $74.3 million valuation, which would have been a 48.8% reduction.