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Illinois Sales Tax Proposal

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  • Willar
    replied
    The Service Tax proposal was part of a bill that included a big increase in the income tax and a very small decrease in property taxes. This failed to pass the House so the House and Senate at the last second passed a "50% Budget" to fund most departments at 50% of last year's funding. The intent was for this to be temporary until a larger budget is agreed upon. However, the Senate President has filed for "reconsideration" of the budget vote so the whole budget is undecided at this point.

    For anything to happen now, a 2/3 vote is required which means the Democrats cannot act alone and will need Republican votes to pass anything. Wide belief is the Service Tax, Cigarette Tax, and Gasoline Tax are dead. Income Tax may be increased, but anything is possible when politicians sit down and start making deals.

    Do not blame the ISSA or SSA for not knowing about this. The proposal was held in secret by Democrat leaders to discuss while not being released in writing. It was released in writing only at the last moment and the Illinois Chamber, NFIB, ISSA, SSA, and many other groups jumped up in protest. The list shown in some documents shows 42 industries that would be subject to a Service Tax, but in reality almost any rental (storage, videos, tools, etc), private service (haircuts, massage, cleaning, lawn mowing, etc), or labor service in Illinois would have been subject to the standard Sales Tax Rate of 6.25% to 10% depending on the municipality.

    We considered mailing to all our clients but the time was so short that we simply told as many people as possible and helped the Chamber of Commerce and NFIB in their objections.

    IF YOU DO NOT BELONG TO THE LOCAL CHAMBER, NFIB, SSA, ISSA, AND OTHER BUSINESS SUPPORT GROUPS, YOU ARE HURTING YOURSELF AND YOUR INDUSTRY. IF YOU WANT A VOICE IN POLITICS, IF YOU WANT TO DEFEND YOUR INDUSTRY, IF YOU WANT BAD LAWS STOPPED, THEN YOU MUST JOIN THESE GROUPS AND DONATE MONEY TO FIGHT FOR YOUR CAUSE. THE ONLY THING THESE POLITICIANS LISTEN TO ARE GROUPS THAT LOBBY IN THE STATE CAPITAL, AND IF YOU AREN'T INVOLVED, YOU WILL BE A VICTIM. (Sorry for yelling but it really is that important.)

    Respect to all!

    Leave a comment:


  • Guest's Avatar
    Guest replied
    here's an update: http://www.insideselfstorage.com/hot...ill-hb174.html.

    Looks like the money grab is picking up steam. The Illinois Senate is your target; if this measure clears that Chamber, the House will likely rubber stamp it.

    Leave a comment:


  • philback
    replied
    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

    Leave a comment:


  • Casey Cavell
    replied
    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

    Leave a comment:


  • MisterJim444
    replied
    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.

    Leave a comment:


  • philback
    replied
    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

    Leave a comment:


  • Guest's Avatar
    Guest replied
    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.

    Leave a comment:


  • Lisa T
    replied
    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.

    Leave a comment:


  • MisterJim444
    replied
    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

    Leave a comment:


  • Lisa T
    replied
    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%.

    Leave a comment:


  • Casey Cavell
    replied
    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

    Leave a comment:


  • Lisa T
    replied
    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.

    Leave a comment:


  • Casey Cavell
    replied
    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

    Leave a comment:


  • Lisa T
    replied
    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.

    Leave a comment:


  • alley50
    replied
    In Texas we pay only SALES TAX for storage of license plated vehicles.

    Leave a comment:

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