In a case that has come under much scrutiny from the public eye, Walmart has lost its first chance as utilizing the much-maligned “dark store theory” in their valuations. An appeal by Walmart to reduce specifically the Pulaski County property tax assessments against the big-box retailer was denied by County Judge Barry Hyde, who said in a ruling that the proposed methods of valuation were “fundamentally flawed.” The Walmart property tax ruling is thought to be challenged by the retailer in the circuit court.

Many other counties in the state have kept a close eye on the ruling as it could be precedent-setting for the other counties in the state. “We expect them to file an appeal with the circuit court,” said Baxter County Assessor Jayme Nicholson, who traveled to Little Rock last month to attend the two-day court case. “We will just have to keep a watch on it.” The entire case in Pulaski County is over the valuation of 8 Walmart supercenters and two additional Sam’s Club locations that were worth a total $145 million in taxable value.

The issue at the core of this lawsuit is how big-box retailers should be assessed. Walmart and others argue that because of the size, location, and uniqueness of each store, the market value of the physical real estate is inherently lower than that of a typical office building. The thought process is that a Home Depot or Staples is so specific to their store model, that it lowers the resale value of the real estate.

As for now, Pulaski County has sided with the county as Walmart is challenged to demonstrate “by a preponderance of the evidence” the correct values in the county.