Lawmakers on Monday moved ahead two measures aimed at ending the unintended imposition of a so-called AirBnB tax on beach house summer rentals, just a week before Memorial Day Weekend and the unofficial start of summer.
The first measure, Assembly Bill 4814, is worded in a way that the levy would essentially apply only to AirBnB properties. It passed out of Monday’s Assembly Appropriations Committee by a 10-0 vote, and would only wage the tax against rentals “obtained through a marketplace, online or otherwise,” according to a statement from the Assembly Democrats Office.
The second measure, Assembly Bill 4520, which the same committee approved in a 10-0 vote on Monday, excludes rentals in the state’s shore counties – Monmouth, Ocean, Atlantic and Cape May – from the tax. Monday’s vote was the first action lawmakers took on the measure.
Under current law, as part of the 2019 budget package, the tax hits all short-term rentals, including summer beach houses, even though that was not to be the intention by lawmakers and the Murphy administration. The 11.65 percent tax was to be levied against any rental under 90 days. Summer rentals typically last a week, so language was written into the law providing that the tax would not be charged on rentals booked through a licensed real estate broker.
But few summer rentals are done via brokers anymore, according to the New Jersey Shore Rentals Coalition. Instead many people – both homeowners and renters – get together via online outlets such as Facebook and Craigslist or through word of mouth.
None of those mediums constitute the kinds of marketplaces that would still be subject to the tax, because on those mediums the rentals are at most being advertised via those sites. In a marketplace, the payments and booking would be done via that medium, namely in the case of AirBnB.
Duane Wallington, a member of the Rentals Coalition who owns a house on Long Beach Island, said earlier in May that many owners still have several weeks of vacancies because of the new tax, whereas in years past they would be completely booked by mid-May for the entire summer.
“We’re seeing it right now with the bookings not happening. If people don’t come to the shore, they’re not going to spend money on the shore, on the businesses,” Wallington said.