Section 60.12. Self-storage services

(a) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise:

Administrative supplies—

(i) Tangible personal property which is consumed in one of the following manners:

(A) Used but not transferred by a vendor in the performance of this service.

(B) Transferred by a vendor to another party in connection with the performance of the vendor’s services when the property is not a critical element of the service.

(ii) Examples of the property include sales invoices, receipts, contracts, estimate sheets, confirmations or other similar items.

Commercial warehouse—A business, such as a public warehouse, engaged in the operation of receiving, handling and storing property for others and the purchaser of the service does not have separate access to the storage area used to hold the property.

Facility for goods distribution—A building which is used for the receiving, holding, handling and distribution of business inventory which is being held for subsequent sale.

Self-storage service—The providing of a building, a room in a building, or a secured area within a building primarily for the purpose of storing personal property with a separate access for each purchaser of self-storage service.

(b) Scope. Effective January 1, 1992, the sale at retail or use of self-storage service at a location in this Commonwealth is subject to tax.

(c) Examples of taxable services. The following are examples of taxable self-storage services:

(1) The rental of a garage on an annual basis for the storage of a boat. If the boat is only kept in the garage for 5 months, the rental is taxable because the primary purpose for the use of the garage is storage of the boat.

(2) The rental of an entire building by a contractor for the storage of construction equipment and materials.

(3) The rental of the basement in a building for the purpose of storing business property which is not intended for sale, such as records storage, office equipment storage or construction equipment storage.

(4) The rental of an airplane hangar if the purchaser rents or leases the entire building or a secured area within the building with separate access for each purchaser.

(d) Examples of services which are not self-storage services. The following are examples of services which are not self-storage services:

(1) Rental of a safe deposit box from a bank.

(2) Storage of property in meat lockers, refrigerators or freezers.

(3) Storage of merchandise or commodities which are intended for sale.

(4) Rental of a locker in a train station.

(5) Storage of shoes for eventual distribution to the purchaser’s various retail stores.

(6) Security deposits charged and subsequently returned to the purchaser by the provider of self-storage services.

(7) Public parking garages.

(8) Rental of a garage in which one half of the area is used for administrative functions and the other half is used for storage.

(9) Rental of a shoe store in a mall and the area rented is primarily used for storage of inventory.

(10) Monthly rental amounts for an apartment which includes a separate detached storage area are not taxable unless the charges for the apartment and storage area are separately stated

(e) Purchase price.

(1) The total amount charged for providing self-storage services is subject to tax. Charges associated with the cost of self-storage such as utilities, insurance, pick-up, delivery, locks or keys are part of the taxable purchase price.

(2) If the primary use of the facility being rented is not for self-storage services, the providing of an area for storage is not taxable unless there is a separate charge for the storage area.

(f) Exclusions.

(1) Self-storage services are exempt if purchased by qualified charitable organizations, volunteer fire companies, religious organizations and nonprofit educational institutions, except if used in an unrelated trade or business. The services are also exempt if purchased by the Federal government or its instrumentalities; or the Commonwealth, its instrumentalities or subdivisions including public school districts. The manufacturing, mining, processing, public utility, farming, dairying, agriculture, horticulture or floriculture exclusion does not apply.

(2) Safe deposit boxes rented from financial institutions.

(3) Storage of property in refrigerator or freezer units.

(4) Charges for the storage of property in commercial warehouses.

(5) Rental or lease of a facility for goods distribution.

(6) Rental of lockers in airports, bus stations, museums or other public places.

(7) The vendor of self-storage services may claim the resale exemption upon its purchase of tangible personal property which is transferred to its purchaser or a third party in the performance of its self-storage services. The vendor may also purchase self-storage services from another provider which the vendor resells to its customer. The vendor may not claim the resale exemption upon its purchase of administrative supplies or the purchase of other taxable services which it may use in the performance of its self-storage services.

(i) The following are examples of property which may be purchased exempt for resale when used in the performing of self-storage services:

(A) The purchase of tangible personal property which is transferred to the purchaser by the vendor such as storage racks, bins, covers, tarpaulins, pad locks or keys. If the vendor charges the purchaser for the use of the property, tax shall be charged by the vendor.

(B) The rental of a building for the primary purpose of subleasing the building to another is not subject to tax. The sublease of the building may be taxable depending on the use of the building by the sublessee.

(ii) The following are examples of property which is taxable when used in the performing of self-storage services:

(A) The purchase of materials, equipment or supplies used in the construction, reconstruction, remodeling, repair or maintenance of buildings which are used in the performance of self-storage services.

(B) The vendor’s purchase of utilities used in connection with the providing of self-storage services are subject to tax unless the utilities are resold through separate meters. If utilities are resold through a separate meter in the providing of self-storage services, the vendor is required to collect the applicable tax.

(C) Administrative supplies.

(g) Storage services.

(1) For the period October 1, 1991, to December 31, 1991, the total charge for the storage of tangible personal property within a building or similar structure is subject to tax.

(2) The following are examples of services which are taxable under this category:

(i) Storage of furs, jewelry and other valuables.

(ii) Safe deposit boxes.

(iii) Cold storage and freezer lockers.

(iv) Storage of raw materials, in-process materials and finished products.

(v) Storage lockers.

(vi) Storage of administrative records, such as files, folders, computer tapes, microfilm, and the like.

(vii) Vehicle, boat and aircraft storage.

(viii) Self-storage facilities.

(ix) The lease of buildings or portions of buildings for the predominant purpose of storage of tangible personal property.

(3) The following are examples of services which are not taxable under this category:

(i) Vehicle parking in a parking lot or an unenclosed parking garage.

(ii) Vehicle, boat or aircraft storage outside of a building or similar structure.

(iii) Separately stated charges for the performance of services other than storage, such as distribution, handling, packaging, assembling, inventory control, quality control, product ‘‘break bulk,’’ ‘‘pick and pack,’’ and the like which are performed in connection with the storage of tangible personal property.

The provisions of this § 60.12 adopted January 8, 1993, effective January 9, 1993, 23 Pa.B. 190.