Walmart Real Estate Business Trust v. City of Bad Axe
Michigan Court of Appeals
2022 WL 12071984.(2022)
- Written by Jamie Milne, JD
Facts
Walmart Real Estate Business Trust (Walmart) (plaintiff) owned a parcel of land and the 184,000 square-foot facility on that land, which housed a Walmart store. The land and its improvements were in the City of Bad Axe (city) (defendant). In 2019, when assessing the property’s value for purposes of ad valorem taxes, the city used a valuation method that relied on the property’s likely sale price if it were sold with a hypothetical ongoing retail lease. Walmart filed a petition with the Michigan Tax Tribunal (MTT) to challenge the city’s valuation. The MTT rejected the city’s valuation method. The MTT determined that the valuation should instead be based on fee simple ownership, which is what would actually be conveyed if Walmart, as the property’s owner and operator, were to sell the property. The MTT defined fee simple ownership as absolute ownership unencumbered by other interests and subject only to the government’s powers of taxation, eminent domain, police power, and escheat. Basing the property’s valuation on such fee simple ownership, the MTT held that the property’s true cash value was $4,270,000 and its taxable value was $2,135,000, a number significantly lower than the city’s original valuation. The city appealed the MTT’s decision to the Michigan Court of Appeals.
Rule of Law
Issue
Holding and Reasoning (Per curiam)
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