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  • Illinois Sales Tax Proposal

    In case you didn't know but there is a new Sales Tax law being proposed for Self Storage in Illinois. (Details Below) Does anyone from any states that successfully prevented this have any good talking points for why self storage should be excluded. I would like to call my rep and talk to them about it but when they ask why they should exclude self storage I would like to have something coherent to say.

    Also I was thinking of putting a flyer with every customers receipt (since it is the first of the month and they will all be in) telling them to call their rep to prevent this sales tax increase. I figure if we get a number of customers to call along with owners that may help. But again would like some talking points to put with the pamphlet.

    Senate Bill 750, moved on to third reading in the Senate last night! It is only one vote away from going over to the House of Representatives. The bill was amended but self storage is still listed as an industry to be taxed! This bill will require all self storage facilities to begin collecting sales tax on every unit rental. This bill (if it passes and ISSA is doing everything it can to try and get self storage removed from the bill) becomes effective upon signing by the Governor. This means you may have to begin collecting sales tax as early as July! Don't rush out and get your ROT certificate just yet. We hope to stall this bill until the fall session but we need your help. [FONT='Arial','sans-serif']Call your State Senator and Representative and ask them to vote NO on SB750. Please call today!!!!

    If you need to find out who your legislator is use the following link:
    http://www.elections.il.gov/district...earchType.aspx

  • #2
    Anti-Tax Flyer

    I put together the flyer I have linked to below to hand out to all of our customers.

    Since they are all coming in over the next couple of days to pay rent this seems like the perfect time to get something in their hands to get some calls in to our reps from someone other than an owner. No rep wants to have an irate constituent.

    Feel free to copy the idea as the more people we get involved the better.

    http://www.storeillinois.com/sales_tax.doc

    Comment


    • #3
      In Texas we pay only SALES TAX for storage of license plated vehicles.

      Comment


      • #4
        Here in Florida, the tenants pay sales tax on their storage units....most of them don't complain, since we have no state income tax, and the state sales tax is 6%, which isn't too bad compared to some states. I guess they got to get their money somewhere.

        Comment


        • #5
          Phil,

          I closed on Always Open Storage in Danville, Illinois a few months ago. I heard about this bill some time ago about mostly more recently from the Illinois Storage Association(which I am m a member), and now it could be in effect by July. Shouldn't there have been emails sent out and shouldn't this have been come out a lot sooner so we could fight it? Now it seems almost to late and everyone is in a panic.

          Casey Cavell
          www.AlwaysOpenStorage.com
          574-527-5122

          Comment


          • #6
            I'd like some more information about why everyone is in a panic. I know that state Storage Associations fight sales tax on storage in every state possible.

            But I worked in Alabama for a while, which did not tax storage units, and now I work in Florida which does. Customers in Alabama (which was 9% sales tax) were happy to find out when they rented that storage units were not taxable, because I think most of them expected it to be taxed. However, I rarely hear anyone here in Florida grumble about the sales tax on their storage unit, again probably because most of them expect it to be taxed.

            I think a lot of people are just trained by now to think of any price as "plus tax".

            But having worked in both types of states, it just doesn't seem to me to be something to panic over....so maybe I'm missing something here.

            Comment


            • #7
              How about my existing tenants who will now need to pay the additional 8% on top of there rent? They are not used to paying this extra amount and have budgeted the exact amount each month. I am guessing that some people might say forget this and give up there unit.

              Now it will be really hard to raise rents at all because there rents would really already be raising 8%. Correct?

              Casey Cavell
              President
              Always Open Storage
              www.AlwaysOpenStorage.com
              Danville, Il

              Comment


              • #8
                I guess it's difficult making the switch from non-taxed to taxed. If storage rentals have always been taxed, then the effect doesn't seem to be as noticeable..... and 8% is high. You think if the state has to add a sales tax to new things, that it could start out smaller, like 3% maybe.

                I know here in Florida, that U-Haul rentals are sales taxed at a lower rate then the standard 6%.

                Comment


                • #9
                  The implementation of sales tax on self storage is a major problem for our industry. Having to charge sales tax on all rental property across the board is something that most legislatures would not try. However, to single out self storage is much easier because we do not have the legislative influence that the office building, shopping center and apartment groups have in most state legislature.

                  As an owner, like Casey pointed out, customers view an increase in rents plus the 5% 6% or 7% sales tax as their monthly nut. They really don’t separate out the rent and tax in their minds as they pay it; just like we don’t consider the 60 or 70 cents in taxes on every gallon of gas we buy. So we are forced to collect that effective rent increase without receiving any value. In point of fact, we are forced to absorb those administrative costs totally for collecting and processing the paperwork and money to the states. And you can forget about getting a rental rate increase for at least a year.

                  I urge every owner and manager in Illinois to make some noise on behalf of your customers. Legislators do respond to pressure from the grass roots if we make our voices heard. If you need information about the House Bill HB 174, I urge you to go to this link http://www.marketvolt.com/custapp/cv.aspx?cm=86843859&x=74904643&cust=4381183

                  Good Luck IL we are pulling for you

                  MisterJim444
                  Learning Never Ends, But Will Time?

                  Comment


                  • #10
                    Thanks Mister Jim! Here in Florida, commercial rentals, like office buildings and shopping centers and stores etc do pay sales tax. Fortunately, residential rentals don't have to.

                    Comment


                    • #11
                      this is not the first time this has been tried in Illinois. One community tried it last year: http://www.mortongroveil.org/assets/...7D92CC6345.pdf

                      Tax fever has, however, spread to the state level now:
                      http://www.insideselfstorage.com/hot...sales-tax.html

                      Please note this is being sold as a means of helping REDUCE the property tax as the primary funding vehicle for education. In place of that (like any elected body would ever cut tax rates), the legislature is looking at jacking up lots of other taxes.

                      Folks, we're in the wrong business. While owners and manager alike are looking for ways of stretching dollars and adding value, govt - esp. at the federal level, remains the one growth enterprise in the economic landscape.

                      The Inside Self Storage link also has links to related articles. Basically, this is a means of call your legislator early and often; you know, the Chicago way.

                      Comment


                      • #12
                        Small Victory for now

                        It looks like the leglislature has decided to delay voting on HB174 due to a lack of support. Right now they are 25 votes short of passing it which is even more reason to increase the pressure on our representatives to kill it once and for all. We have gotten a great response from handing out brochures to all of our tenants as they pay rent. Many claim they are going to call their rep right away.

                        http://www.suntimes.com/news/politic...053109.article

                        Comment


                        • #13
                          Great Strategy

                          philback:

                          I think that you have hit on a great idea of asking customers to call their legislators. This should give everyone in IL a 6 month window before it comes up again. Now there is time to really kill this thing and the cash grab from our customers.

                          MisterJim444

                          PS It is fun to make my 300th post a positive one. Thanks philback for the update.
                          Learning Never Ends, But Will Time?

                          Comment


                          • #14
                            I would like to hand out these brochures at our storage facility in Danville, Illinois. Where did you get them? Was there anyway we could have been told about this before it was already being voted on? I just feel like I was told to late about it.

                            I told my manager at Always Open Storage to call every single tenant and have them call our representative. Also everyone who comes in gets a sticky pad with the number for our representative to call.

                            Casey Cavell
                            Always Open Storage
                            Danville, Illinois
                            www.AlwaysOpenStorage.com

                            Comment


                            • #15
                              Originally posted by Casey Cavell View Post
                              I would like to hand out these brochures at our storage facility in Danville, Illinois. Where did you get them? Was there anyway we could have been told about this before it was already being voted on? I just feel like I was told to late about it.

                              I told my manager at Always Open Storage to call every single tenant and have them call our representative. Also everyone who comes in gets a sticky pad with the number for our representative to call.

                              Casey Cavell
                              Always Open Storage
                              Danville, Illinois
                              www.AlwaysOpenStorage.com

                              Casey

                              I put the pamphlet together myself. I pasted the link to the one I created in one of the posts above. Feel free to take it and adapt it for yourself.

                              As for hearing about it earlier the first I heard about it was from the assocation on Friday. I am just an owner like yourself but we are handing it out at all 11 of our locations with some strong reaction from our customers so hopefully they will get in touch with their reps.

                              Good luck.

                              Phil
                              www.storeillinois.com

                              Comment

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