DISTRESSED DAILY: ‘Dark Store Theory’ Casts Shadow on City Taxes

Retailers are pushing an ominous sounding tax-cutting tactic called “dark store theory” to cut their municipal assessments, dimming the cities’ hopes for a post-pandemic revenue rebound.

For tax collectors, the theory is no idle threat. Merchants argue that the capacious stores of yesteryear are less valuable as e-commerce rises. Under this reasoning, according to S&P Global Ratings, even new stores are obsolete because they aren’t suitable for future tenants -- and therefore should be taxed less.

Instead of using factors like construction cost or income produced, dark-store acolytes say that buildings should be valued by comparing them with ...