The national Self Storage Association (SSA), Illinois Self Storage Association (ISSA) and several of their members have launched a campaign against a self-storage sales tax that is already in force in several suburban Chicago municipalities and has been proposed for more.
Harwood Heights began collecting a 3 percent sales tax on self-storage beginning April 1. In 2008, the Village of Morton Grove instituted a similar tax. Now the city of Oakbrook Terrace is considering a measure that would hit tenants with a 3.5 percent tax on their self-storage rentals beginning July 1, 2010.
The SSA and ISSA feel the tax is unconstitutional, arbitrarily targeting the self-storage industry and its customers. The tax does not apply to the rental of other types of space such as spare rooms, warehouses, garages, apartments, offices, retail stores or industrial space. There is also no tax on the use of mobile-storage containers or mobile-storage warehousing, and no tax on storing goods in other types of space.
In addition, opponents claim the measure represents double taxation, because a portion of each self-storage tenant’s rental fee is already remitted to the government in the form of property tax.
In the case of Harwood Heights, the only self-storage operator affected is Public Storage Inc. The company was not informed of the tax proposal before Village trustees enacted it. Oakbrook Terrace contains two self-storage facilities, one belonging to Public Storage and the other to Metro Storage.
The Oakbrook City Council will hear public opinion on the matter during a meeting on May 11. The SSA is encouraging Illinois operators to voice their concerns.
Self-Storage Tax in 2010? [Self-Storage Talk]