One of the bad things about living through bad economic times is that it is not just businesses and consumers that are feeling the pinch. Governments are feeling the pinch as well. When you consider that they operate pretty much due to the taxes they collect, if people are not making much money and are spending even less than tax collections and essentially government operating budgets feel the crunch as well.
The problem that comes from government budgets faced with a shortage is that they either have to cut programs that people count on or find the money elsewhere. That typically means someone will be faced with a tax hike.
Small businesses, like self storage facilities, are having a hard enough time staying afloat in this economy. The self storage industry as a whole though is doing well. With people often forced into downsizing their homes or having to move around more for work, the self storage industry has quietly become a pretty solid investment. However, the problem with that success is that some state governments are targeting them to help cover a portion of their budget shortfall.
The possibility that their state may impose a sales tax on them has many self storage owners concerned. A recent survey conducted in April at the Self Storage Association Spring Conference & Trade Show showed sales tax as the deepest concern of self storage facilities. About 70 percent of respondents listed a possible sales tax on storage unit rentals (lien laws were a close second at 65.9 percent).
“What we learned [through the survey] is that the areas that concerned self storage operators the most were those things that they could not directly control—generally situations dictated by government regulations,” said SSA President & CEO Mike Scanlon
States currently with sales tax proposals for the self storage industry working their way through the legislative process are Illinois, Michigan, Rhode Island, and North Carolina. However, there is hope that some of the measures will not pass. Maine voters turned down an opportunity to lower their income tax by adding a tax to certain services and things like self storage rentals.
“We oppose these unfair taxes wherever they pop up,” said Scanlon. “There are just so many that we really need the local operators to get involved. Lawmakers need to understand that these levies are passed along to the most vulnerable members of their communities, not the businesses.”
“SSA Poll Demonstrates Industry’s Concerns with Government Interference.” SSA Globe; June 2011.
“Maine Voters Refuse to Lower Income Tax by Expanding Sales Tax to Include Services Such as Self Storage.” Self Storage Industry News; 10 June 2010.