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The Taxman Cometh
By Joe Doherty

ne of the reoccurring issues for self-storage owners is the persistent threat of states and municipalities enacting new taxes or increasing existing taxes on their operations. As part of our advocacy efforts, the SSA attempts to defeat or reduce those tax burdens where possible. The SSA is currently working to resolve issues in Illinois and Nebraska and succeeded in defeating a new tax in Virginia.

For the past several years, the Illinois legislature has considered legislation to require income-producing property owners, including self-storage owners, to provide their local assessor with income and expense data to use during the initial valuation process. The primary supporter of this legislation is the Cook County Assessor’s Office. Although the business community has repeatedly defeated the legislation, it is back for consideration again this year.
Similar to Illinois, legislation to expand the sales tax base to include numerous “services” has been before the Nebraska legislature for many years. This year’s legislation is part of the governor’s plan to reduce property taxes in exchange for the highest statewide sales tax in the country. Self-storage is wrapped up in this year’s bill as part of a new tax on “storage services.” Of course, self-storage is not a service, but since when have the details mattered when the government wants more tax dollars? Several Nebraska operators and I testified in opposition to the bill, as did numerous other business owners and citizens. As of this writing, we are awaiting further action from the legislature.
money laying on a stack of tax return paperwork
The Virginia legislature also proposed a sales tax on self-storage rentals this year. Fortunately, it died a quicker death than the Nebraska sales tax proposal. The national SSA and Virginia SSA worked collaboratively to defeat this bill.
Taxes, particularly at the city or county level, often appear without notice. If you hear of a new tax under consideration that affects self-storage, please let me know (jdoherty@selfstorage.org). Generally, it is easier to be proactive and defeat those bills before they become law. Once a tax is “on the books,” the task to remove that revenue from the coffers is much more difficult. If you are looking for additional resources on taxes affecting self-storage, I encourage you to review the Legal Resource Center at selfstorage.org.
Joe Doherty is senior vice president, Chief Legal & Legislative Officer of the Self Storage Association (SSA).