Illinois SSA Fights New Sales Tax

The Illinois Self Storage Association this month continued its efforts to fight a new six percent service tax being considered by the Illinois legislature, by sending lobbyist Randy Witter to meet with State Senator James Meeks. Senator Meeks was the legislator who first sponsored the bill, which was then known as SB750, although it has since taken a new incarnation as HB174.

The ISSA has been fighting the tax since legislators first began talking about it more than a year ago. The new tax, which will amend the Illinois State Finance Act and Illinois Income Tax Act, and create the School District Property Tax Relief Fund, is intended to reduce the dependence of public schools on taxes paid by property owners and provide schools with income provided by new taxes paid by everyone. Advocates of the new tax reform, which also increases income taxes, say that it will increase tax revenues by $7.2 billion, while reducing the burden of property taxes by about $2.5 billion. The bill would increase the income tax rate for individuals, trusts, and estates from three to five percent, increase the tax rate for corporations from 4.8 to eight percent, and would impose a six percent service tax on service providers such as self-storage facilities.

Several states have considered service tax legislation as a strategy for defeating budget shortfalls in recent years. In 2007, Michigan's legislature repealed its service tax bill hours after passing it. South Dakota's Supreme Court struck down the self-storage aspect of South Dakota's service tax, saying that self-storage businesses were protected from the new law by the state constitution. South Dakota self-storage companies and customers who paid the new tax were offered refunds. North Carolina, like Illinois, is currently considering a service tax.

The ISSA, though it is fighting the bill, is not trying to defeat it entirely. It is, however, trying to have self-storage businesses exempted from the service tax. In June 2009 the ISSA wrote to all of its members, asking them to write to their legislators asking them to vote "no" on HB174, and asking them to make the same plea to their customers. In November the ISSA wrote to its members again, this time requesting a one-time $100 donation from each facility, to be used to help pay for lobbying downstate. The association used the money to hire lobbying firm Cook-Witter.

In their January meeting, Senator Meeks could give Witter little reassurance. He said that he did not think the bill would be voted on after the primary in February, as the ISSA had feared. Instead, he advised that he thought the vote would not proceed until after the general election in November.

Kim Kilpatrick is exploring the business of storage and also looking into self storage in Chicago.