The Wisconsin Court of Appeals has upheld the City of Eau Claire's tax assessments against Scheels All Sports, Inc., dismissing the sporting goods retailer's claims of excessive taxation. The court ruled that Scheels failed to provide sufficient evidence to prove that the assessments were incorrect. This decision impacts Scheels and other businesses facing similar tax assessment disputes.

This case stems from Scheels' operation of an anchor store at Oakwood Mall in Eau Claire. The property was assessed at $7,174,000 in both 2019 and 2020, and at $6,787,600 in 2021. Scheels filed claims for excessive assessments with the City’s Board of Review, arguing that the property was overvalued and overtaxed. The City disallowed these claims, prompting Scheels to file a lawsuit in the circuit court seeking reimbursement for the alleged overpayments. The case was set for a bench trial.

Prior to the trial, the circuit court granted the City’s motion to exclude evidence that Scheels intended to use to argue that the assessments violated the Wisconsin Constitution’s Uniformity Clause. This clause requires that property taxes be uniform across similar properties. The court also rejected Scheels' attempt to introduce the evidence again during the trial.

At the conclusion of the trial, the circuit court determined that Scheels had not overcome the presumption that the City’s assessments were correct. The court dismissed Scheels’ claims, leading to the appeal.

The court ruled that the circuit court did not err in dismissing Scheels' claims. In its opinion, the court stated, "Scheels failed to produce sufficient information to overcome the presumption of correctness for the City’s assessments." The judges on the panel included Stark, Hruz, and Gill, although the specific judge who authored the opinion was not identified.

The court noted that Scheels presented an appraisal that relied on ten comparable properties to argue for a lower assessment. However, the circuit court found that most of these comparables were inappropriate due to notable differences from the Scheels property. The court categorized only one of the ten properties as a reasonable comparable.

In its analysis, the court emphasized the importance of using appropriate comparables in property assessments. It stated that the Manual for property assessment requires assessors to choose comparable properties that are similar in age, condition, use, and economic characteristics. The court found that many of Scheels' comparables were either vacant, in distress, or sold for a different highest and best use, which made them unsuitable for comparison.

As a result, the court affirmed the circuit court's decision, stating that Scheels did not provide enough evidence to challenge the City's assessments. The ruling reinforces the presumption of correctness that tax assessments carry and highlights the importance of adhering to established valuation methodologies.

This ruling has implications for businesses in Wisconsin that may be facing similar disputes over property tax assessments. It emphasizes the need for accurate and comparable evidence when challenging tax valuations. The decision could deter other businesses from pursuing similar claims without robust evidence.

Looking ahead, Scheels may consider appealing the decision to the Wisconsin Supreme Court. However, details regarding any potential appeal were not available in the court filing. The outcome of this case could influence future tax assessment disputes in Wisconsin.