HB 1907
In CommitteeHouse
Self-service storage/tax
Defining the rental or lease of individual storage space at self-service storage facilities as a retail transaction for the imposition of business and occupation and sales and use taxes.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill makes it clear that renting individual storage units at self-service facilities is a taxable retail transaction in Washington, requiring operators to collect sales tax and pay B&O tax. Revenue from this tax will be directed toward affordable housing programs, especially those involving cooperative ownership of manufactured home communities.
- Clarifies that renting or leasing individual storage space at self-service storage facilities is a retail transaction subject to business and occupation (B&O) tax and sales and use tax.
- Amends RCW 82.04.050 to explicitly include such rentals under the definition of 'sale at retail' in subsection (2)(g), overriding any prior ambiguity about taxability based on rental duration.
- Adds a new section (Sec. 2) directing that revenue from this tax be used to support cooperatively owned manufactured home communities and affordable housing initiatives.
- Reaffirms that the tax applies regardless of how long the storage space is rented — even for short-term or month-to-month leases — and does not require the tenant to occupy the space continuously.
Who is affected
- Self-service storage facility operators — Operators of self-service storage facilities will now be required to collect and remit sales and use taxes on rental or lease charges for individual storage spaces, regardless of rental duration. This aligns their tax obligations with other retail businesses.
- Individuals and businesses using self-storage services — Customers renting storage spaces will now pay sales tax on top of their rental fees, increasing the total cost of storage services.
- Washington Department of Revenue — The Washington Department of Revenue will gain authority to collect additional tax revenue from the self-storage industry and will be responsible for enforcing compliance with the new tax rules.
- Affordable housing providers and cooperatives — Manufactured home community developers and affordable housing programs may receive new funding from tax revenues generated by this bill, supporting efforts to create and maintain affordable housing.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Dedicated revenue stream for cooperatively owned manufactured home communities and affordable housing programs will expand access to stable, long-term housing for low- and moderate-income families—particularly in rural and suburban areas where manufactured homes are a primary affordable option.
HousingPeopleRef: Sec. 2Low- and middle-income Washingtonians who qualify for housing assistance through cooperatives or affordable housing programs will benefit from increased funding, improving housing security and reducing displacement risk in high-cost regions like Puget Sound.
FinancialPeopleRef: Sec. 2Closing a long-standing tax loophole (self-storage being exempt while other short-term rentals are taxable) improves tax fairness and broadens the base in a fiscally constrained environment, supporting sustainable public investment.
FinancialLean peopleRef: Sec. 1, RCW 82.04.050(2)(g)Funding for cooperatively owned manufactured home communities supports worker- and resident-owned housing models, creating stable, high-quality jobs in construction, property management, and community services—especially in communities of color and rural areas.
Business & EmploymentPeopleRef: Sec. 2State-level tax clarity reduces legal uncertainty for local governments and the Department of Revenue, streamlining enforcement and reducing costly disputes over tax applicability.
Local GovernmentLean peopleRef: Sec. 1, RCW 82.04.050(2)(g)
Potential Concerns (5)
Customers renting self-storage units will now pay an additional 6.5–10.4% sales tax (depending on local rates) on top of rental fees, increasing monthly costs for households using these services. This disproportionately affects low- and middle-income renters who rely on affordable storage for seasonal items, moving transitions, or small business inventory overflow.
FinancialLean industryRef: Sec. 1, new subsection (2)(g) to RCW 82.04.050Small self-storage operators (especially sole proprietors or micro-businesses) will face new compliance burdens—including tax registration, collection, reporting, and potential penalties—even if their margins are thin. While the bill treats them like other retailers, many lack dedicated accounting staff to absorb this added complexity.
Business & EmploymentLean industryRef: Sec. 1, reenacting and amending RCW 82.04.050(2)(g)Municipalities may experience modest administrative strain as the Department of Revenue enforces compliance across thousands of small facilities, potentially diverting local enforcement resources. However, no new local tax collection responsibilities are imposed.
Local GovernmentRef: Sec. 2Larger self-storage REITs and regional operators (e.g., Public Storage, Extra Space Storage) are well-positioned to absorb tax compliance costs and may gain competitive advantage over smaller operators unable to pass full tax burden to customers without losing market share.
Business & EmploymentLean industryRef: Sec. 1, RCW 82.04.050(2)(g)No direct impact on public safety; the bill focuses on tax classification, not facility safety standards or emergency response protocols.
Public SafetyRef: Sec. 1, RCW 82.04.050(2)(g)
Who Is Most Affected
Self-storage facility operators—especially small, independently owned facilities—will face new tax compliance costs and may need to raise prices or absorb reduced margins. Larger operators are better positioned to adapt.
Low- and moderate-income households who use self-storage during moves, for seasonal items, or to supplement small business operations will pay more for storage but may benefit from improved housing affordability through redirected tax revenue.
Cooperatively owned manufactured home communities and affordable housing providers will receive new, dedicated funding to expand and maintain affordable housing units, directly supporting their missions.
The state Department of Revenue gains authority and resources to collect previously uncollected tax revenue, improving compliance and revenue forecasting—though it must invest in outreach and enforcement for a new sector.