On Sunday, New Jersey self-storage operators will begin charging a 7 percent sales tax on their units. They can only wonder what it may cost them in lost rentals.
In July, Gov. Jon S. Corzine proposed a 1 percent increase on the existing state sales tax as well as an additional levy on previously untaxed services, including self-storage, tanning salons, tattoo parlors and health clubs. The latter goes into effect on Oct. 1. The tax expansion is expected to raise $332 million annually.
Mike Lackland, owner of Lackland Self Storage, which has 21 New Jersey sites, told Associated Press he has lost about a dozen customers who wanted to avoid paying the tax. In today's Asbury Park Press, other operators shared their woes, stating the new tax has created a lot of additional accounting work and confusion on behalf of customers.
"Customers think the fee is from us, which it's not," said Irene LeBlanc, manager of Harbor Mini-Storage in Eagleswood, N.J. "All they know is that they have to pay more out of their pocket." LeBlanc feels the facility will lose customers as a result.
Mary Mitchell of Freehold (N.J.) Self-Storage says the tax most hurts those on fixed incomes, particularly senior citizens who have downgraded their residences and use self-storage to house their goods and memories.
The New Jersey Self Storage Association has filed a law suit with the Federal Court in Newark, N.J., alleging the tax violates constitutional protections. Assocation President Chris McGrath said, "The state has selected a very narrow sector of commercial real property and applied a sales tax to it." For information about the association's efforts and how to help, operators should visit www.njssa.org.