By Lucas Willard
http://stream.publicbroadcasting.net/production/mp3/wamc/local-wamc-1002479.mp3
Pittsfield, MA –
In October, North Adams Mayor Richard Alcombright noticed a change in his city's finances.
That's because the Walmart store changed their tax classification from a limited partnership to a corporation. The change meant that the store no longer had to claim inventory, shelving, or refrigeration, and any other non-essential items as taxable property. The result was a huge drop in property tax revenue.
In 2008, Massachusetts passed a corporate tax reform law designed to close tax loopholes to for large corporations. Department of Revenue Spokesman Bob Bliss
Bliss said the law forced big companies to make a choice.
Walmart, which is classified federally as a corporation, changed its stores in Massachusetts to match their federal filing. Nothing illegal about it. But the shock of the financial impact drew concern from local leaders.
This month, the Berkshire Delegation, including the county's 4 State representatives and State Senator Benjamin Downing, began looking to solutions to prevent such a shock from happening again.
But certain things had to be considered. In Massachusetts businesses have the right to classify themselves, and legislation could not change that. State Senator Downing
But one possible solution is to draft legislation stating that any such company that would make a significant impact upon changing, would need to notify local governments before-hand. Senator Downing discusses one potential idea
Downing says a third possible solution would be that after a large company changes, and if more tax revenue heads to the State, that the State then be able reimburse cities in towns that are noticing a dramatic drop in tax dollars from the shift
No bills have been written at this time, but the delegation hopes for a draft and hearing this year.
The change at the Pittsfield Walmart will result in a drop in property tax revenue from $187,000 last year, to only $24,500 this year. In North Adams, the town will lose about $140,000.
A new Walmart Supercenter will also be constructed in North Adams.
Most big-box stores in Massachusetts are already classified as a corporation, and as far as the State knows, a similar large impact has not been detected elsewhere in the Commonwealth.