Sales Tax Slice: I Like To Move It, Move It (Move It!)


MovingBoxes

 

Summer is the prime season for moving, known for being one of life’s most stress-inducing activities. After worrying about booking movers, getting and packing boxes, setting up utilities, and forwarding your mail (among countless other tasks), your mind may turn to another key question: will I owe sales tax?

Most states do not impose a sales or use tax on moving services that are not accompanied by the transfer of tangible personal property. However, a few states do tax these services. Iowa specifically enumerates house and building moving services as taxable. Mississippi and Wyoming impose sales tax on moving service fees, but only for intrastate moves. West Virginia subjects all house moving service charges to sales tax.

For those who might find their new home too small for all their things, or perhaps just want to de-clutter their current home, self-storage may be an attractive option. Like moving services, most states do not impose sales tax on the rental of self-storage units, with some exceptions. Florida imposes tax on self-storage units as the rental of real property. New York does not charge sales tax when real property is leased for the purpose of storage, but it does impose tax on the service of providing storage space. This approach determines tax liability based on the amount of control actually exerted over the storage space. More control, as in the case of leasing real property, means no sales tax. Meanwhile Iowa taxes self-storage units unless they are lockers or units at apartment complexes for the convenience of tenants. Louisiana makes a distinction based on what is being stored. For example, the state specifies that the storage of automobiles, clothing, furs, or rugs are taxable.

If you’re moving to a new home, or just moving things into a storage unit this summer—hopefully figuring out whether you owe sales tax will be one less thing to stress about.

Continue the discussion on Bloomberg Tax’s State Tax Group on LinkedIn: Does your state impose sales tax on moving or storage charges? 

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