SCARBOROUGH — Scarborough reached a settlement on Oct. 23 with Sam’s Club and Walmart for 2018-2019 tax abatement requests that will cost the town a total of $173,000 in lost revenue.

Both Walmart and Sam’s Club allege they are being over-taxed in Scarborough and requested reductions in their valuations on March 5. Although both businesses also asked to have their 2017 taxes reduced but those requests were denied by the state board of property.

“We’re very pleased with the final agreement,” Town Manager Tom Hall said. “For the next four years, there will be no opportunity for them to challenge that value and we see that as a tremendous victory for the town.”

Walmart, the parent company of Sam’s Club, is ranked No. 1 in the Fortune 500 and had more than $500 billion in revenue in 2018 and made more than $6.6 billion in profit, according to the magazine. The retail giant operates nine Maine locations that include Thomaston, Sanford, Windham, Biddeford, Waterville, Ellsworth, Bangor, Brunswick and Houlton.

According to an article in The Times Record, Walmart has been appealing tax valuations across the U.S.

Some appeals, according to The Times Record, are based on a “dark store loophole” that allows big box stores such as Walmart, Target and Sam’s Club to reduce their property values by claiming their fully operational business should be assessed the same as vacant buildings.

For 2018, the town will reduce Walmart’s property taxes by $44,612, from $382,083 to $337,471, after a assessed valuation on April 1, 2018 reduced its property value by just over $2.7 million from $23,170,600 to $20,465,200.

Sam’s Club will have its 2018 property tax bill reduced by $46,785.43, from $244,665 to $197,880 after a valuation on April 1, 2018 decreased the property value by $2,837,200, from $14,837,200 to $12,000,000.

The 2018-2019 tax reduction for both businesses will be applied as a credit against the second installment of property taxes due on March 15, 2020.

From 2019 to 2025, the town will reduce Walmart’s property taxes each year by $39,769.38, after an assessed valuation on April 1, 2019 reduced their property value by $39,769, from $340,607 to $300,838.

From 2019 to 2025, Sam’s Club will have its property taxes reduced by $41,695.08, from $218,095 to $176,400 to  after a valuation on April 1, 2018 reduced their property value by $2,836,400, from $14,836,400 to $12,000,000.

Within 30 days, the town must issue revised tax year 2019-2020 real estate bills to each business that reflects the 2019 abatement and 2020 reductions.