Are customer fees for using permanently installed storage lockers subject to Georgia sales tax?

Plain-English summary

Customer charges for the lockers were not taxable. The Department viewed them as fees for a storage service, using the nontaxable treatment of safe-deposit-box rentals and storage-warehouse services as guidance.

The physical installation independently supported the result. The lockers were wired in and affixed to buildings and concrete foundations, and removing them would cause substantial damage. They were real-property fixtures, and Georgia did not tax the rental of real property.

Common questions

Q: Were customers treated as renting tangible lockers?

A: No. The ruling characterized the customer charge as a storage service and the installed lockers as real property.

Q: Why did attachment to the building matter?

A: Permanent attachment and significant removal damage made the lockers real fixtures rather than movable tangible personal property.

Citations and references

• Ga. Comp. R. & Regs. r. 560-11-10-.02(1)(w) -- real fixtures
• Ga. Comp. R. & Regs. r. 560-12-2-.11(7) -- safe-deposit-box rental
• Ga. Comp. R. & Regs. r. 560-12-2-.47 -- storage warehouse services

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2014-16

Original ruling text

Date Issued:
October 7, 2014
Georgia Letter Ruling: LR SUT 2014-16
Topic: Service Provider-Locker Rental

This letter is in response to your request for guidance on the application of Georgia sales and use tax to charges
made by your client, for the rental of storage lockers.
Facts as presented by the Taxpayer
Taxpayer has executed a contract (“Agreement”) with Client on behalf of its subsidiaries to install, manage, and
operate storage locker (“locker”) concession facilities (“Facility” or “Facilities”) at locations owned by the Client in
various states including Georgia (“the Locations”) and pay the Client a share of the revenue therefrom. Taxpayer’s
responsibilities under the Agreement include the design, fabrication, installation, and management of each
contracted Facility for a specified term, subject to certain revenue performance metrics.
Taxpayer operates the Facilities as a concessionaire. As such, Taxpayer’s revenues are derived from fees charged to
Location customers who use the lockers to store belongings during their stay at the Location. The Facilities include
the buildings, space, equipment, and utilities that are owned or used by Taxpayer and are necessary to operate the
locker concession at the Location. The Facilities, including the concrete slab foundations to which the lockers are
affixed, are built, modified, and /or adapted as necessary by Taxpayer to accommodate the installation of Taxpayer’s
locker units and related equipment. The locker units are wired into the Location’s electric utility service. All lockers
are located inside the Location, some located in open-air areas and others in enclosed areas. Lockers adjacent to
interior walls are affixed to both the interior wall and the foundation.
The Facility and all remodeling, addition, installations and any improvements, to the Facility that are not readily
moveable without requiring substantial repairs to the Facility will remain the property of the Location regardless of
whether the improvements were made or done by Taxpayer or the Location. The Location will provide utilities and
maintenance for the Facility.
Issue
Are the revenues Taxpayer receives from Location customers for the use of lockers subject to Georgia’s sales and
use tax?
Analysis
All retail purchases and sales of tangible personal property are taxable unless provided for otherwise.1 Sales tax is
levied and imposed upon the retail purchase, retail sale, rental, use, or consumption of tangible personal property
and on certain enumerated services that occur in this state.2 "Retail sale" or a "sale at retail" means a sale to a
consumer or to any person for any purpose other than for resale of tangible personal property or certain services. 3
Georgia’s sales and use tax is not imposed on the sale or rental of real property.
“Real fixtures” means personal property that has been installed or attached to land or a building or group of
buildings and is intended to remain permanently in its place. A consideration for whether personal property is a real
fixture is whether its removal would cause significant damage to such property or to the real property to which it is
attached. The term real fixtures shall not include trade fixtures. Real fixtures are classified as real property.
Examples of real fixtures are plumbing, heating and cooling, and lighting fixtures. 4 Taxpayer’s lockers are
permanently installed and attached to buildings and foundations; removal of the installed lockers would cause

1

O.C.G.A. §§ 48-8-1 and 48-8-30(b).
O.C.G.A. § 48-8-30.
3
O.C.G.A. § 48-8-2(6)(A).
4
Ga. Comp. R. & Regs. r. 560-11-10-.02 (1)(w).
2

October 7, 2014
LR SUT-2014-16
Service Provider-Locker Rental
Page 2 of 2

significant damage to the property to which they are attached. Thus, Taxpayer’s lockers are real fixtures and
classified as real property.
The rental of safe deposit boxes at a bank is not subject to the tax.5 In addition, storage warehousemen are
considered to be providers of a nontaxable service. 6 Although the case at hand does not involve safe deposit boxes
or storage warehousemen, the guidance with respect to those transactions indicates that Taxpayer’s charges for the
use of lockers are not subject to the tax.
Ruling
Taxpayer’s charges for the use of lockers are essentially storage charges and as such are not subject to Georgia’s
sales and use tax. In addition, Taxpayer’s lockers are real fixtures and classified as real property. Georgia does not
impose the tax on the sale or rental of real property, further indicating that charges made by Taxpayer for the use of
storage lockers are not subject to Georgia’s sales and use tax.
The opinions expressed in this ruling are based upon the information contained in your request and limited to the
specific transactions, facts, circumstances, and taxpayer in question. Should the circumstances regarding the
transactions change, or differ materially from those represented, then this ruling may become invalid. In addition,
please be advised that subsequent statutory or administrative rule changes or judicial interpretations of the Statutes
or Rules upon which this advice is based may subject similar future transactions to a different tax treatment than that
expressed in this response.

5
6

Ga. Comp. R. & Regs. r. 560-12-2-.11(7).
Ga. Comp. R. & Regs. r. 560-12-2-.47.