Self-storage facilities in the state of Washington will be subject to a business and occupation (B&O) tax starting April 1, according to the department of revenue (DOR). The new tax applies to gross revenue generated from unit rentals, regardless of whether the business engages in retail sales or other activities, according to sources.
This change is part of the implementation of Engrossed Senate Substitute Bill 5794, which was signed into law on May 20 by Governor Bob Ferguson. The legislation originally also included a retail-sales tax on self-storage unit rentals, however, that component was defeated.
Self-storage facilities generating more than $1 million in gross income during fiscal year 2025 will be taxed at a rate of 1.75%. Those with less than $1 million in gross income will be taxed at a rate of 1.5%. Operators must file their B&O taxes quarterly, with the first payment due by July 1 to cover April through June.
Related:Woodstock, IL, Considers 5% Municipal Tax on Self-Storage Rentals
In addition, self-storage businesses with an annual gross income exceeding $125,000 will no longer qualify for active non-reporting (ANR) status. Operators currently on ANR status must update their filing frequency through the DOR portal or by contacting the agency.
The Washington Self-Storage Association (WSSA) believes the tax is “unconstitutional and unfairly targets self-storage while exempting warehouses, office buildings and apartment rentals,” according to a statement published on its website. The association is engaging legal counsel to challenge the law in superior court.
WSSA provides members with resources, education, networking opportunities and legislative advocacy to protect and promote the interests of self-storage businesses in the state.
Sources: Bloomberg Tax, Washington DOR Issues Special Notice Concerning Self-Storage Businesses Subject to B&O TaxWashington Self-Storage Association, New B&O Tax on Self-Storage Effective April 1, 2026
ISS Staff
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