# CSSA Warned California Operators on September 24, 2026 That Cities Are Shifting Business Taxes to Gross Receipts > CSSA's late-September Leg Alert is a portfolio-level tax story, not a single-city ordinance. The association flagged a pattern of California cities considering gross receipts business taxes while reminding operators that Governor Newsom's El Niño state of emergency left price-gouging rules suspended only for now. - URL: https://www.yourcaio.co/news/california-cssa-gross-receipts-business-license-alert-september-2026 - Published: 2026-10-09 - Author: David Cartolano (https://www.yourcaio.co/about) - Category: Regulatory - Tags: California Self Storage Association, Business License Tax, Gross Receipts Tax, Local Regulation, Price Gouging - Source: [California Self Storage Association](https://www.californiaselfstorage.org/news/leg-alert---check-your-local-business-license-activity) ## Key Takeaways - CSSA posted a Leg Alert on September 24, 2026 warning that cities across California are reviewing business license programs and tax structures, including switches from flat business taxes to gross receipts taxes. - CSSA said gross receipts-based business taxes can equate to thousands of dollars in increased annual liability and materially impact self-storage property values. - The association urged operators to monitor city council agendas and minutes, contact CSSA when proposals surface, engage local chambers of commerce, and advocate before ordinances pass. - The same alert referenced Governor Newsom's El Niño state of emergency and noted paragraph 18 expressly suspends Penal Code section 396 price-gouging restrictions at this time, while urging readiness if restrictions return. - CSSA positioned local tax vigilance alongside winter-storm preparedness, reflecting a regulatory environment where municipal finance and consumer-protection rules both hit operator NOI. The **California Self Storage Association** told operators on **September 24, 2026** to treat city council agendas as a balance-sheet risk: municipalities statewide are revising **business license fees and tax structures**, and CSSA is seeing moves from **flat business taxes to gross receipts taxes** that can add **thousands of dollars** in annual liability and **materially impact property values**. The Leg Alert landed the same week [New York City operators faced a November 1 DCWP compliance cliff](https://www.yourcaio.co/news/nyc-dcwp-november-1-2026-pricing-compliance-countdown-october-2026), reminding portfolio owners that 2026 regulation is both **state consumer rules** and **local finance grabs**. --- ## What Exactly Did CSSA Flag on Business Licenses? CSSA's monitoring team described **increased activity by cities across California** reviewing business license programs. The association's core warning: - Traditional **flat** business taxes are giving way to **gross receipts** structures. - The shift **can equate to thousands of dollars** of increased taxes. - Higher taxes **materially impact property values** because buyers capitalize NOI. CSSA did not name specific cities in the September 24 post. The point is pattern recognition: this is not one rogue ordinance. It is a **repeatable municipal playbook** when general funds need revenue without raising voter-visible sales taxes. Operators were told to: 1. Monitor **city council agendas and minutes** for license fee or tax proposals. 2. **Contact CSSA** when a city considers increases. 3. Engage the **local chamber of commerce**. 4. Advocate **before** approvals, not after. That workflow matters because gross receipts taxes are **revenue-linked**. A facility pushing rates after [soft national advertised averages](https://www.yourcaio.co/news/yardi-matrix-september-2026-advertised-rates-1-9-percent-august-2026) still pays more tax simply for collecting rent, unlike a flat fee that scales with inflation only when councils revisit it. --- ## Why Are Gross Receipts Taxes Different From Flat License Fees? Flat business license fees behave like annual permits: predictable, often modest relative to revenue. **Gross receipts taxes** skim a percentage of top-line revenue (structure varies by city), so tax expense **rises with rate increases and occupancy gains**. For self-storage, three mechanics hurt: **NOI sensitivity.** Property tax, insurance, and debt are already rising on many California balance sheets. A revenue-based city tax lands on gross rent collections, not net income, similar in spirit to [Washington's 2026 B&O shift on storage receipts](https://www.yourcaio.co/news/washington-self-storage-bo-tax-q2-filing-deadline-july-2026). **Acquisition math.** Buyers underwriting cap rates must deduct a tax that scales with the revenue they plan to implement post-close. CSSA's **property values** language is code for **cap rate expansion** when buyers discover a gross receipts levy mid-diligence. **Portfolio complexity.** A ten-city California footprint can mean ten different tax bases, reporting forms, and audit triggers. CSSA is asking for **local eyes** because Sacramento cannot track every council workshop. --- ## How Does the El Niño Warning Fit the Same Alert? CSSA paired tax vigilance with **storm preparedness** and **price-gouging** risk. The association linked Governor **Gavin Newsom's** El Niño preparedness **state of emergency** and noted **paragraph 18** of that order **expressly suspends Penal Code section 396 price-gouging restrictions at this time**. CSSA still recommended: 1. Prepare for **flooding and extreme winter weather** at facilities. 2. Stage assets for **damage risk**. 3. Plan for the possibility that **price gouging rules return**, covering **storage** under the penal code. That is not abstract in California. [Los Angeles County's emergency price-gouging rules for storage](https://www.yourcaio.co/news/la-county-self-storage-price-gouging-emergency-expires-2026) dominated early-2026 headlines. CSSA's September note says the **El Niño SOE** temporarily relaxes **state** section 396, but operators should not assume **local** or **reinstated** protections will stay off. Tax and gouging sit in the same alert because both are **margin shocks** that hit without a lease-line rent increase. --- ## What Should Operators and Investors Do Now? **Assign someone to read agendas.** CSSA cannot substitute for a property manager scanning **city council packets** in each jurisdiction. Set a monthly calendar reminder tied to rent roll review. **Model gross receipts in pro formas.** When underwriting California acquisitions, ask sellers and brokers directly whether business tax is **flat or receipts-based**, and request **two years of city business tax bills**. If a city is **considering** a switch, haircut exit cap rates until the vote resolves. **Coordinate with CSSA early.** The association asked operators to report proposals so it can coordinate **industry response**. Late engagement loses: cities pass gross receipts ordinances in single hearings when no storage owner speaks. **Keep gouging playbooks warm.** Even with section 396 suspended under the El Niño SOE language CSSA cited, maintain **rate change logs** and **disaster communications templates**. [NYC's bifurcated DCWP timeline](https://www.yourcaio.co/news/nyc-dcwp-self-storage-rules-effective-september-17-2026) shows regulators stagger effective dates; California emergency law can flip just as fast. --- ## The Numbers Worth Writing Down - **September 24, 2026** CSSA Leg Alert posting date - **Thousands of dollars** potential tax increase per CSSA gross receipts warning - **Flat vs. gross receipts** business tax structure shift flagged statewide - **Paragraph 18** El Niño SOE language suspending **Penal Code 396** gouging rules **at this time** - **Three** CSSA storm-prep recommendations (flood risk, asset readiness, gouging re-enactment) - **Four** advocacy steps (agendas, CSSA contact, chamber, early engagement) --- ## Local Finance Is the Next California Headline State associations win headlines on lien law and rent control. **City councils** win quietly when they reclassify storage operators into **gross receipts** business tax schedules. CSSA's September 24 alert is early warning, not a final ordinance list. That is the window when **property values** are still negotiable and when **operator testimony** can still change draft language. Ignore the agendas and you will discover the tax on the **closing statement**. Read them and you might still lose the vote, but you will at least **underwrite the hit** before you bid. --- ## Sources - [Leg Alert - Check Your Local Business License Activity](https://www.californiaselfstorage.org/news/leg-alert---check-your-local-business-license-activity), California Self Storage Association, September 24, 2026 - [Governor Newsom proclaims state of emergency to bolster statewide El Niño preparedness, protect California](https://www.gov.ca.gov/2026/09/21/governor-newsom-proclaims-state-of-emergency-to-bolster-statewide-el-nino-preparedness-protect-california/), Office of the Governor of California, September 21, 2026 - [El Niño State of Emergency Proclamation (PDF)](https://kmph.com/resources/pdf/67dc355e-b06d-41fe-90b3-651ade3612a3-SIGNED_SuperElNinoSOE92126.pdf), State of California Executive Department, September 21, 2026 ## Frequently Asked Questions ### What did CSSA tell California self-storage operators on September 24, 2026? CSSA urged operators to watch city council agendas for business license and business tax changes. The association reported increased municipal activity shifting from flat business taxes to gross receipts taxes, which it said can raise taxes by thousands of dollars and hurt property values. Operators should alert CSSA and engage locally before votes. ### Why does a gross receipts business tax matter for storage facilities? Unlike a flat license fee, a gross receipts tax scales with revenue. CSSA warned the switch can add thousands of dollars in annual tax and reduce net operating income without changing street rents. Buyers underwriting California acquisitions must model the tax as an operating expense tied to revenue, not a fixed admin cost. ### How does CSSA's alert connect to El Niño and price gouging? CSSA cited Governor Newsom's El Niño preparedness state of emergency and noted paragraph 18 currently suspends Penal Code 396 price-gouging rules. The association still told operators to prepare facilities for severe weather and to plan for possible re-enactment of gouging limits that include storage under the penal code. ### What should operators do if their city proposes a higher business tax? CSSA recommends contacting the association, reaching out to the local chamber of commerce, and engaging early before council approval. Monitoring agendas and minutes is the first step because many proposals pass with limited industry input unless operators show up in the comment period. ### How does this compare with other 2026 storage tax rules? Washington began taxing self-storage gross receipts under B&O rules in April 2026, while Illinois clarified lease tax treatment for storage. CSSA's alert is municipal and discretionary: each California city can structure licenses differently, so portfolio operators face patchwork exposure unlike a single state statute. --- Cite as: David Cartolano, "CSSA Warned California Operators on September 24, 2026 That Cities Are Shifting Business Taxes to Gross Receipts," YourCAIO.co, 2026-10-09, https://www.yourcaio.co/news/california-cssa-gross-receipts-business-license-alert-september-2026