Sales Tax on Self-Storage Introduced in North Carolina Legislature

A potential sales tax on self-storage has once again been introduced to the legislature in North Carolina, and the national and North Carolina Self Storage Associations have jumped to combat the measure. If passed, Senate Bill 658, 21^st Century Tax Modernization Plan, would impose a sales tax on self-storage rentals in the state.

SB 658 was introduced on April 19 and referred to the House Standing Committee on Finance on April 20. Information about the bill can be viewed at www.ncga.state.nc.us/gascripts/BillLookUp/BillLookUp.pl?Session=2011&BillID=S658.

The NCSSA hopes to get as many of the states self-storage owners and operators as possible to visit their local representatives and discuss why self-storage should be taxed as real estate, not a service. The association is also aiming to raise $20,000 in 2011 to battle the tax.

SSA president and CEO Mike Scanlon sent a letter to the bills sponsor, Senator Daniel G. Clodfelter (D-Mecklenburg), reminding him that the self-storage portion of the bill will be passed on to consumers, who may often be from low-income households (single parents, retirees, students, soldiers, small-business owners, etc.). Scanlon wrote it is arbitrary to include only one commercial real estate sector in the bill, and that self-storage already contributes real estate taxes. His letter ultimately urges the removal of self-storage and mini-storage from the tax proposal.

The threat of sales tax was previously faced by North Carolina self-storage operators in 2009, when senators contemplated new sources of tax revenue. In October of that year, the NCSSA met Representative William L. Wainwright to discuss the harmful impact of such a tax.