In a decision that will have a far-reaching impact, the Wisconsin Supreme Court today threw out a common method of assessing property taxes involving the Walgreen Co.

Two dozen communities, mostly larger municipalities, have used the assessment method and are involved in either municipal appeals or lawsuits with the drugstore chain. Walgreens lawyers said that the high court decision will result in a more equitable assessment of all properties and bring Wisconsin into line with most other states. The seven high court justices unanimously agreed with Walgreens.

Lawyers representing municipalities said the decision will result in higher taxes for other property owners in the affected communities.

Walgreens does not own property. Instead, developers find properties typically located on what they consider the best corner or the best street to attract business, said Robert Gordon, a lawyer who represents the chain in Wisconsin. Stores are built to Walgreen specifications including some "super adequacies" - specific wiring, for example - and then leased by Walgreens for the long term.

The company typically pays higher than market rates, in part to repay the developer's costs. Walgreens also pays the property taxes on the buildings it uses.

Madison and the other communities - including Milwaukee, West Allis, Cudahy, Hales Corners, Waukesha and Kenosha in the metro area - have been charging property taxes on the higher lease agreement. The company argued, and the court agreed, that the assessment should be based on market value, which is a lower figure.

Gordon said the decision also could affect other businesses because the lease agreement used by Walgreens is not unique and some businesses use variations of the Walgreens model. One alternative financing arrangement that could be affected involves businesses that sell their real estate at an above market price, then lease it back for a higher than market rent.

"There will be a very significant impact all over the state on many businesses," Gordon said.