The Trials of Taxing ‘Big Box’ Stores

September 15, 2016Articles GlobeSt.

Mary T. Nicolau authored the GlobeSt. article, "The Trials of Taxing ‘Big Box’ Stores."

So-called “big box” retail stores are a source of constant controversy for those who work in the area of real estate tax because there is little in the way of consensus among law makers, assessors and lawyers as to how to approach valuing, assessing and taxing. This article offers a brief overview of the current trends in valuing big boxes for real estate tax purposes.

In most jurisdictions, property taxes are based on the assessed value of the fee simple estate. “Fee simple” is defined in the Dictionary of Appraisal of Real Estate as the “Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the government powers of taxation, eminent domain, police power or escheat.”

Under generally accepted real estate appraisal practices, this definition requires that the property be valued, if unencumbered by any other interest or estate, on the basis of its market value, or its “value-in-exchange.”

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