April 26, 2011 12:42 PM
Typically, self storage has avoided sales tax because it is taxed as real estate, not a service. But that standard is now being threatened in North Carolina as a potential tax on self storage has been introduced to the legislature. Dubbed the “21st Century Tax Modernization Plan,” Senate Bill 658 would impose a sales tax on self storage rentals in the state. [More]
December 18, 2009 9:00 AM
North Carolina's state House and Senate Finance Committees are taking a careful look at overhauling the state's sales tax code....According to the North Carolina Self Storage Association, the tax reform being considered by the NC legislature would place a four percent sales tax on self storage. Legislators argue that self storage owners will not be harmed by the tax, because people will be paying less in sales tax on other products and services. But the North Carolina Self Storage Association disagrees. Its owners and operators are fighting the new tax, arguing that the occupancy rates in North Carolina self storage units have been falling because of the recession, and that the sales tax would cause rates to fall even further. The NCSSA further argues that other sectors of the real estate market would not be subject to a sales tax....
In addition, the NCSSA argues, 90 percent of self storage operators are small business owners. The new tax reform legislation, if passed, will place the burden on small business owners to collect and pay a new tax to the state, one that will require them to raise their rates and to explain to tenants that rates are being raised. The tax legislation will also immediately reduce the value of self storage facilities by imposing an additional expense -- which will make it harder to sell self service businesses in North Carolina. [More]