Abstract
This paper analyzes the effect of Walmart and Target on municipal property tax rates using panel data for all New Jersey municipalities from 1998 to 2007. We analyze the impact of Walmart (30 openings) and Target (33 openings) in the host municipality and the nearest adjacent municipality. We find evidence that entry by either retailer lowers the tax rate in the host municipality. However, the estimated reduction in the tax rate is much larger for Target. Target entry reduces the equalized property tax rate by $0.38 per $100 of market value in the host municipality or about 16.8 % while Walmart reduces the equalized property tax rate in the host municipality by $0.063 per $100 of market value or about 2.8 %. The most striking result is the contrast between the positive and significant effect of Walmart entry on the equalized tax rate in the adjacent municipality and the negative and significant effect of Target entry on the equalized tax rate in the adjacent municipality. Walmart entry (in the host municipality) raises the equalized tax rate by about $0.23 per $100 of market value (about a 10 % increase). Target entry, on the other hand, reduces the equalized tax rate in the adjacent municipality by $0.14 per $100 of market value or about 6.2 %.
Published Version
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