Last month, New Jersey raised its sales tax from 6 percent to 7 percent, but thats not what has storage operators up in arms. Their beef is with the application of the new rate to a group of previously exempt services, including self-storage.
Starting Oct. 1, storage tenants will have to pay sales tax on their rent, creating yet another challenge for facilities statewide. Other affected businesses include health clubs, tattoo parlors and limousine providers. Rather than take things lying down, these companies have decided to battle the state.
The New Jersey Self Storage Association is assisting on the storage side. The group has retained a law firm to fight the tax, claiming it is unconstitutional. It has also created a list of instructions for local facility owners, and its website, www.njssa.org, offers pointers to help businesses communicate concerns to legislators. Finally, the associations monthly newsletter included a copy of a letter operators can send to customers to inform them of the new tax and garner support.
One of the associations members, Charles Sapienzo of CNS Self-Storage in Galloway Township, has been handing out postcards about the tax to all of his customers. The message, written in a red stop sign, reads, Stop 7% Sales Tax on Self-Storage Rooms. An enlarged version of the postcard hangs in the rental office. Customers are asked to sign the cards, which he then mails to elected officials. He has also called several state legislators.
Sapienzo estimates his customers will have to pay an additional $9 per month on his average-size units, which rent for about $120 per month, a total of almost $21,000 per year. Like other operators, he worries the new tax will deter customers from renting as well as negatively impact his plans for rate increase and facility expansion.