Self-Storage Rentals and Leases Are Taxable as Services in Washington, Effective April 1, 2026

Effective April 1, 2026, income from the rental or lease of storage space at self-service storage facilities is subject to Washington Business and Occupation (B&O) tax under the “Service and Other Activities” classification.

“Self-service storage facility” means any real property designed and used for the purpose of renting or leasing individual storage space to occupants who are to have access to the space for the purpose of storing and removing personal property on a self-service basis, but does not include a garage or other storage area in a private residence.

To report their income, affected businesses will need to add the “Service and Other Activities” classification when they electronically file their excise tax return. To add the new classification, taxpayers should log into Washington’s My DOR portal, click “Get Started” on the My DOR Services page, click the “File Return” link in the Excise Tax Return panel, click the “Add/Delete Tax Classifications” button, add the “Service & Other Activities classification” and click Next.

Note that the “Service and Other Activities” B&O tax classification has three tax rates. Affected businesses will use their taxable income from the prior calendar year to determine the applicable tax rate for their business.

Additionally, self-storage businesses no longer qualify for active non-reporting (ANR) status if their annual income is more than $125,000, even if they do not make retail sales. If a business is currently on ANR status and their gross annual income is more than $125,000, they can update their filing frequency through the My DOR portal or by calling the Washington Department of Revenue at 360-705-6705. If an affected business is not already registered, they must complete a business license application. (Special Notice, Washington Department of Revenue, January 27, 2026)