Village of Lake in the Hills, IL, Considering a 5% Self-Storage Sales Tax

The village of Lake in the Hills, Illinois, is considering a 5% sales tax to be charged on self-storage and vehicle-storage unit rentals. Its board will vote on the measure on Nov. 14. If the tax is approved, it could go into effect on Jan. 1, according to a source.

Local officials initially considered the idea in September, but the board had questions about how the tax would be collected and if it would apply to the Lake in the Hills Airport, which allows aircraft storage. The village will now consider allowing business owners to keep a portion of the tax to offset their costs of collecting it, the source stated.

The measure was proposed because self-storage facilities don’t create significant sales-tax revenue, jobs or foot traffic for other businesses, officials said. They also don’t generate as much property tax because their assessed value tends to be lower than industrial or retail businesses, according to village documents.

Last month, the board said it was interested in moving forward with the tax, which is expected to raise an additional $120,000 annually. Officials said it isn’t designed to generate revenue but offset costs and lost revenue on other uses. Notices were sent to self-storage operators on Oct. 25, according to the source.

Related:More Money in Your Pocket: Leveraging the U.S. Tax Code to Improve Self-Storage Cash Flow

Similar taxes exist in nearby Carpentersville and McHenry, Illinois. In July, the village of Plainfield, Illinois, said it was considering a similar tax. Another was proposed and vetoed by the Pekin, Illinois, City Council in June.

Source: Daily Herald, Lake in the Hills Moves Toward New Tax on Self-Storage Units