For decades, self-storage was fortunate enough to fly below the radar of government interest. Until recent years, there was precious little interference in self-storage by the state legislatures. State lien laws were developed, but self-storage was not generally taxed as a service. In fact, it has been one of the grounds on which municipal planning boards and councils have often opposed self-storage projects: property taxes aside, they generate no city revenue.

If you've been paying attention to what's happening in industry news, you've no doubt seen this is changing. Several states have made attempts or effectively instituted a sales tax on self-storage unit rentals, and our state and national associations are working hard to head off such devastating legislation at the pass. We've logged some victories, but defeat could be on the horizon for operators in Illinois. Legislators there are working hard to pass a bill that would put a 6 percent sales tax on self-storage as early as July. For those who don't know what's going on, here's some background info:

In following a thread about the issue on Self-Storage Talk, I see Illinois operators deeply concerned about the effect this could have on their business. A forum member in Florida says unit rentals are taxed in her state and tenants really don't grumble because there's no state income tax and tenants are accustomed to paying it. But if you're in Illinois, this new sales tax will essentially translate into a 6 percent increase on customers' rent, a steep change in an economic crunch.

Mr. Jim Chiswell, on the forum as MisterJim444, sums up the issue well:

"The implementation of sales tax on self-storage is a major problem for our industry. Having to charge sales tax on all rental property across the board is something that most legislatures would not try. However, to single out self-storage is much easier because we do not have the legislative influence that the office building, shopping center and apartment groups have in most state legislature."

In short, self-storage gets picked on because we don't have the same clout as other real estate sectors. I think we can all see a disturbing trend developing here. If HB174 gets passed in Illinois, it sets another dangerous precedence for other states to follow.

What do you do? Make sure you know about self-storage-related legislation in your state! Awareness is key in this fight. The best way to keep informed is to join and communicate regularly with your state self-storage association; if you don't have a strong state association, look directly to the national SSA, which is a vigilant watchdog on these fronts.

Tell me what's going on in your state ... If you're in Illinois, what are your thoughts on the recent aggressive move made by your Senate? If you're in another state, have you heard whispers of similar challenges? Share your thoughts in the blog.