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Michigan Self-Storage Operators Face Threat of Sales Tax

Posted in News, Archive, News, Happenings

Self-storage is one of several service businesses that will be taxed under a new law passed by the Michigan Legislature as part of its state budget deal last week. Public Act 93, sponsored by Rep. Steve Tobocman, D-Detroit, imposes a 6 percent sales tax on 57 categories of services and will affect about 16,000 businesses, according to an article published in Crain’s Detroit Business. About 74 percent of the tax will come from services such as consulting, office administration, warehousing and storage, security systems, packaging and labeling, landscaping, and janitorial.

The tax could mean a double penalty for many businesses, including self-storage. For example, a storage-facility operator will have to charge all tenants the sales tax, which could affect occupancy rates; he will also have to pay tax on certain outsourced services he might purchase such as landscaping.
Some businesses are struggling to understand if their services–or which of their services–are included under the tax. The Michigan Department of Treasury is working to clarify what is included in each of the federal codes that signify taxable services in the new law. The department’s website,, lists the services subject to tax and will contain more information as it becomes available. Resources can also be found at, the website for the Independent Accountants Association of Michigan.
The newly formed Self Storage Association of Michigan (SSAM) has hired a lobbyist in Lansing, Mich., to advocate against the budget measure. Association members are being encouraged to contact their state representatives and voice their opposition to inclusion of self-storage as a taxable service in the new budget. To contact SSAM, call 800.449.3795; e-mail

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