You asked several questions regarding the Connecticut's sales tax on furnishing self-storage space. The questions and answers are provided individually below.

What is the history of Connecticut's sales tax on self-storage facilities?

In 2002, Connecticut extended the 6% sales tax to businesses that rent space, other than residential space, for storing personal property. The tax was effective for rentals of such space on and after October 1, 2002 (PA 02-1, May Special Session as amended by PA 02-4, May Special Session). The two public acts that imposed the tax were emergency certified and passed as part of larger tax and budget bills. The self-storage tax was not part of any bill introduced earlier in the 2002 regular session, so there was no public hearing on the provision before it was enacted.

Since 2002, only one bill has been proposed to repeal the tax, proposed HB 6788 in 2007. That bill was referred to the Finance, Revenue, and Bonding Committee on January 23, 2007. The committee took no action on it.

How many facilities are subject to the tax and how much revenue does it currently generate?

According to Michael Galliher of the Department of Revenue Services research unit, in 2006, 190 facilities paid the tax and total revenue for that year was $ 3. 5 million. For 2005, figures were similar: 192 facilities paid the tax and revenue totaled $ 3. 3 million.

Are any people or entities exempt from the tax?

The law exempts rentals of residential living space and entire buildings, such as warehouses. It excludes general warehousing and storage, where warehouse staff customarily handles, stores, and retrieves customer property using the warehouse's equipment and that does not allow a customer free access to the storage space. It also excludes accepting specific items for storage, such as clothing at a dry cleaners or golf bags at a golf club (CGS § 12-407 (2) (P)).

Does the state have other taxes on renting space?

Connecticut imposes a 6% sales tax on rental of winter storage space or moorings for noncommercial boats (CGS § 12-407 (2) (M)) and, with some exclusions, on provision of motor vehicle parking spaces, other than metered space, in lots with at least 30 spaces (CGS § 12-407 (37) (N)). It also imposes a 12% tax on room rentals in hotels or lodging houses for 30 days or less (CGS § 12-407 (2) (H)).

How many and which other states have a similar tax on self-storage facilities?

Six other states already impose a sale tax on self-storage facilities. Michigan will extend its use tax to such facilities starting December 1, 2007. The states and current sales tax rates are listed in Table 1 below. Sales tax rates are as of January 1, 2007. The information comes from a 2004 survey by the Federation of Tax Administrators, supplemented and updated by information provided by the Connecticut Self Storage Association, computer searches of the Commerce Clearinghouse state tax database, Westlaw, state statutes, and state tax agency websites.

Table 1: States Imposing a Sales Tax on Self-Storage Facilities

* Michigan's use tax on self-storage facilities starts December 1, 2007.

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