Derby City Council had suggested a new tax on large shops and supermarkets, asking Pickles for town halls to be given the power to levy an additional tax of up to 8.5 per cent of the business rate on large supermarkets or large retail outlets with an annual rateable value of over £500,000.
Derby was backed by a number of other councils and submitted the proposal under the Sustainable Communities Act, which allows communities and councils to put forward ideas to government.
But in response, Pickles wrote that the government "does not support these calls for higher taxation", adding that larger premises already pay higher business rates and larger firms are not eligible for the reliefs given to smaller businesses.
"Imposing new, additional taxes on supermarkets and larger shops will ultimately push up the price of food and the cost of living, hitting low-income families the hardest," he said.
Pickles claimed that councils already have powers to support local high streets and small shops "across parking, planning, licensing and the night-time economy, street markets, improving the street scene, supporting ‘click and collect’, tourism promotion, to exercising their role as a landowner in their own right."
He added that the challenges faced by high streets are also about how the internet is changing how people shop.
"In that context, your proposal is sadly an all-too predictable siren call from some parts of local government: namely, the solution to every policy issue seems to be how to impose new taxes. This is a lazy way of thinking."
Leader of Derby City Council Ranjit Banwait said: "Despite the letter from the secretary of state, our campaign continues. We cannot sit back and allow disproportionate cuts to local government budgets harm our local high streets.
"This is a further example of a government intent on killing off local government. We will leave no stone unturned in our campaign to find solutions to protect local services."