In 2013 Minnesota passed a new self-storage sales tax to be implemented on April 1, 2014. The self-storage tax would have effected all customers classified as business customers storing items at self-storage locations or warehouses. Collecting the storage tax would have been required by each self-storage provider and would have created an inherent requirement that each self-storage customer be classified as business or non-business.
According to the Warehouse and Storage Services: 2013 Tax Law Changes produced by the Minnesota Department of Revenue:
“Starting April 1, 2014, business-related warehousing and storage services will be taxable in Minnesota. This means state sales and use tax is due when a business buys warehouse or storage services for its tangible personal property…”
The proposed tax would have raised an estimated $95.4 million over the remainder of the current budget cycle according to State Revenue Commissioner Myron Frans as quoted in a recent MPR News Article.
This unpopular tax was repealed on March 21, 2014, shortly before its implementation date. According to the Minnesota Warehouse Association, Minnesota Governor Dayton signed a $434-million dollar tax reform bill into law on March 21 after it was approved by both the Minnesota Senate and the House earlier in the day. The bill passed in the Senate with a 58 to 5 margin and in the House with a 126 to 6. It repeals the B2B taxes approved in 2013, including the sales tax on warehousing and self-storage services.
The repeal was fought by a coalition formed by a diverse group of organizations including many U-Haul Self-Storage Affiliates, the Minnesota Chamber of Commerce, the Farmers Union, the Trucking Association, and over 20 other organizations.