Michigan Self-Storage Operators Freed From Service Tax

Good news for Michigan self-storage operators: The states lawmakers repealed the new 6 percent service tax only hours after it went into affect on Dec. 1, instead adopting a 21.99 percent surcharge on the new business tax, which goes into effect Jan. 1. The new agreement calls for amnesty and rebates for those parties who pay the service tax before it can be officially removed from law. It also caps the liability for any single company at $6 million and adjusts the credits companies receive for investment and employment under the Michigan Business Tax.
 
While the surcharge may affect real estate operators who work in the state, many business groups say it is still preferable to the service tax, which would largely have affected business-to-business transactions. For Michigan, the business surcharge will bring in more than $750 million a year in revenue. For the self-storage industry, it means a reprieve from a dreaded tax burden that would also affect consumers.
 
In the trenches against the service tax was the Self Storage Association of Michigan Association (SSAM), formed earlier this year, which hired a Lansing, Mich.-based lobbying firm to advocate its cause. SSAM President Dan Morris, Executive Director Tim DeWitt, and founding member Maurice Pogoda all actively participated in creating an informed defense of the industry and argument for the repeal. SSAM was assisted in its efforts by the national Self Storage Association, with which it is affiliated.