Notice of new 7% Sales Tax

to Occupants

As soon as possible, you should take the following steps:

1. Mail a letter to each existing occupant at his/her address on file informing occupant that the State of New Jersey has put a new 7% sales tax on self storage room rentals and on exterior parking of vehicles (including RV’s), effective October 1, 2006.

2. Advise the occupant(s) that you (your company) bear no responsibility for imposing this tax and indeed that you and your company objected to this tax and did everything you could to prevent the tax from being imposed as part of the 2006-07 State Budget.

3. Advise the occupant that the NJ Self Storage Association is planning to sue Governor Corzine and the State Department of the Treasury to void this sales tax as being unconstitutional under both the federal and state constitutions, but that a decision on this lawsuit is a number of months away.

4. Advise occupants that if the Court does not “enjoin” the State Division of Taxation from collecting the tax, you will be required by law to collect the sales tax on the amount of the room rental and remit that tax to the State. There are questions about the tax and how it is to be charged that have not been answered by the legislation, and we await regulations from the NJ Division of Taxation; NJSSA is watching for the issuance of these regulations.

5. If the lawsuit is successful but is decided after the imposition of the sales tax on October 1, 2006, any money paid as sales tax and remitted by your facility to the State will have to be refunded by the State of New Jersey and not by your company.

6. Ask each occupant to contact his/her elected state representatives (Assembly and Senate) and complain about the expanding the sales tax to the rental of self storage units where people store their own good and belongings and to outside vehicle parking.

7. Compose a sign that incorporates items # 1 thru 6 above and place prominently on the front counter; train your staff to be prepared to respond to any questions by occupants.

SAMPLE LETTER TO OCCUPANTS ABOUT 7% SALES TAX

(Your company letterhead)

Dear Occupant,

As part of the adoption of the NJ State Budget, Gov. Jon Corzine signed into law a 7% sales tax on all rentals of self storage, effective October 1, 2006 and thereafter, resulting in increased cost to you; by law, we must charge and collect the additional 7% and remit that money to the Sate Division of Taxation.

Our facility (or Company) had nothing to do with imposing this increase in your rental. We joined with the NJ Self Storage Association (NJSSA) in opposing this tax increase and objected to having this in the 2006-07 state Budget. Blame the Governor and the legislators who voted for this tax, not us. In fact, the NJSSA is suing the Governor and the State Division of Taxation to repeal this tax as being unconstitutional under both the federal and state constitutions. While the final decision may be months away, we will ask the Court to “enjoin” the State from collecting this tax until there is a final decision. There are also questions about charging the tax and we await regulations from the Division of Taxation. But note that if we must charge the tax, you must pay it and we must remit it to the State. If our lawsuit is successful and the tax is unconstitutional, we will not charge you the tax; but if we have to collect the tax, and then the Court says that it is unconstitutional, you will have to apply for a refund to the State Division of Taxation and not this Company. It is the state’s obligation to refund any tax not properly or correctly collected, not __________ Self Storage.

If you have the chance to speak with your Assembly Members or Senator, please complain about this tax. After all this is a tax on your own property, not something you are buying. We believe that is unfair, improper and unconstitutional. Thank you for your cooperation and attention.

Very Truly Yours,

_________________ Self Storage