Last week Michigan Gov. Jennifer Granholm proposed that the state sales tax be extended to consumer services such as “self-service storage,” but also that the rate be dropped from 6 percent to 5.5 percent. Though the Self Storage Association of Michigan (SSAM) and the national Self Storage Association (SSA) were able to defeat a similar attempt to tax self-storage in the state two years ago, the debate will be reinvigorated with the proposal of the Governor’s new budget, expected to be complete by July 1.
The SSA Legislative and Regulatory Advisory Committee has voted to support SSAM with funding for its fight. The association argues that self-storage is the rental of real property and should not be subject to sales tax.
In December, Granholm signed a bill that allowed improvements to the state’s self-storage lien law. Originally introduced to protect military members who had been deployed overseas, the bill includes other changes that are considered a victory for Michigan self-storage operators.
The proposed sales tax would not apply to healthcare, social assistance, education, new construction, real estate, insurance commissions, or any services directly connected to business operations. Granholm also wants to cut the 22 percent surcharge on the Michigan Business Tax by 50 percent next year and eliminate it entirely by 2012.
The roughly $550 million raised by the Governor’s proposed change would at first go to maintain the current level of spending for public education.
Source: CB Online, Michigan governor pitches expanding state sales tax to services, dropping rate to 5.5 percent