Still a lot to learn of broader implications from Board of Tax Appeals ruling in Johnson County case

A state tax decision is expected to lower property tax revenue in Johnson County, but its statewide implications are not yet clear. 

The Kansas Board of Tax Appeals ruled in favor of the “Big Box Retailers” at the end of June in one of many appeals currently in process from Johnson County.  This is the second ruling that would effectively lower the valuations on “Big Box Retail” stores in Johnson County following a sharp increase in valuations between 2015 and 2016. 

Although the board has not yet published the rationale for its ruling, it appears to focus on a change in the method of appraisal used in Johnson County for these retailers. 

Unfortunately for other local school districts, the summary ruling last week leaves an unclear picture of what the financial impact to their revenue will be as the argument is sure to play out in the courts over the next few years.  A more complete picture of the ruling will come with a more detailed explanation that has been requested by the parties, which may take up to 90 days. 

Some have suggested that this ruling is more in line with the “Dark Store Theory” of commercial appraisal, which is seen as shifting local tax burdens more heavily onto residential property owners. More information on if this is an accurate picture will be gained from the more detailed opinion that is expected by the end of the summer. 

As discussions continue throughout the state about the burden of property taxes, this is certain to be an issue that will receive continued discussion and hearings next year as the Kansas Legislature returns in January.  

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