SB 5711
In CommitteeSenate
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 retail sale for tax purposes, meaning sales and use taxes and B&O taxes apply. Revenue from these taxes will be used to fund affordable housing programs, especially those supporting cooperatively owned manufactured home communities.
- Clarifies that renting or leasing individual storage space at self-service storage facilities is a retail sale subject to sales and use taxes and business and occupation (B&O) tax.
- Amends RCW 82.04.050 to explicitly include self-service storage rentals in the definition of 'sale at retail' under subsection (2)(g).
- Adds a new section (Sec. 2) directing that tax revenue from this change be used to fund cooperatively owned manufactured home communities and affordable housing support programs.
- Reenacts and amends existing tax rules to ensure consistency with the new classification of storage rentals as taxable retail sales.
Who is affected
- Self-service storage facility operators — Self-service storage facility operators must now collect and remit sales and use taxes on rental or lease fees for individual storage spaces, and may face new compliance obligations under business and occupation (B&O) tax rules.
- Individuals and businesses renting storage units — Customers renting storage units will likely see an increase in total cost due to added sales and use taxes on their monthly rental fees.
- State and local governments — The state and local governments gain new tax revenue from storage rentals, which the bill directs toward affordable housing initiatives.
- Affordable housing programs and nonprofits — Nonprofit and government entities that operate or support affordable housing programs may benefit from newly appropriated funds.
Pro/Con Analysis
Potential Benefits (2)
The bill creates a dedicated revenue stream for cooperatively owned manufactured home communities and other affordable housing programs, directly supporting low- and moderate-income households—including seniors, farmworkers, and rural residents—who rely on affordable, community-controlled housing models. These programs often serve populations excluded from conventional financing and are critical for preventing displacement in high-cost regions like Western Washington.
HousingPeopleRef: Sec. 2By clarifying that storage rentals are retail sales, the bill closes a long-standing tax loophole that allowed some operators to avoid collecting sales tax—improving tax compliance and fairness. This strengthens the state’s ability to enforce equitable tax administration and reduces competitive distortions between storage facilities and other retail businesses that do collect sales tax.
Public SafetyPeopleRef: Sec. 1, RCW 82.04.050(2)(g)
Potential Concerns (3)
Renters of self-service storage units will face a new sales tax (currently 6.5%+ local rates) on monthly rental fees, increasing their out-of-pocket housing-related expenses. While individual storage is often used for transitional needs (e.g., downsizing, moving, seasonal items), the tax burden falls disproportionately on lower- and middle-income households who rely on low-cost storage and cannot absorb unexpected cost increases.
FinancialPeopleRef: Sec. 1, RCW 82.04.050(2)(g)Although revenue is earmarked for affordable housing, the bill does not prevent operators from passing the full tax burden to consumers, and the new tax may reduce demand for storage services—hurting small operators and independent facility owners who lack pricing power to absorb the tax. Many self-service storage operators are small businesses or sole proprietors operating 1–3 facilities; they may face compliance costs and reduced customer volume, potentially leading to closures or consolidation.
HousingPeopleRef: Sec. 1, RCW 82.04.050(2)(g) and Sec. 2The bill imposes new B&O tax reporting and collection obligations on storage facility operators, increasing administrative burden and compliance costs—especially for small operators without dedicated tax staff. This could discourage new market entrants and reduce competition, potentially leading to higher prices and fewer options for consumers over time.
Business & EmploymentLean peopleRef: Sec. 1, RCW 82.04.050(2)(g)
Who Is Most Affected
Low- and middle-income households who rent storage units for moving, downsizing, or seasonal storage will face higher monthly costs. While the tax is modest per unit, cumulative effects are meaningful for households living paycheck to paycheck. However, they benefit indirectly from the new housing revenue stream, which targets the same populations.
Small, independently owned storage facilities (often 1–3 locations) will face new compliance and administrative costs. While they may pass costs to customers, many lack pricing power and may see reduced demand. Larger regional operators may absorb costs more easily and benefit from reduced competition over time.
Large regional or national storage REITs and operators (e.g., Public Storage, Extra Space Storage) are well-positioned to absorb compliance costs and benefit from improved tax fairness. Their scale allows them to internalize costs and potentially raise prices without losing customers, increasing their relative advantage over small operators.
Nonprofits and local governments that operate or support cooperatively owned manufactured home communities (e.g., manufactured home park housing cooperatives, community land trusts) will benefit from new dedicated funding, enabling them to preserve affordability, improve infrastructure, and expand units—especially in rural and suburban areas where such housing is scarce.
State and local governments gain new tax revenue with no new spending mandates, improving fiscal flexibility. Local governments (especially those with many storage facilities) benefit from increased sales tax collections, while the state gains B&O revenue. However, the earmark limits future legislative discretion over the funds.