With less than a week before the July 4 weekend, lawmakers sent Gov. Phil Murphy a bill aimed at alleviating the unintended impact the so-called AirBnB tax had on beach house summer rentals.
The measure, which was approved Thursday by both the Assembly and Senate, would exclude rentals in the state’s shore counties – Monmouth, Ocean, Atlantic and Cape May – from the surtax.
It would also only levy the tax on rentals “obtained through a marketplace, online or otherwise,” according to a statement from the Assembly Democrats Office. The definition was crafted in a way so that it would not include summer rentals, which are advertised via word of mouth or online, and unlike AirBnB do not deal with payments and reservations online.
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 the intent of lawmakers and the Murphy administration.
Summer tourism is the heartbeat of the shore, and this law was never intended to hurt the private homeowners who help it grow and thrive.
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, which would be exempt under the new law, should it be approved.
The measure, according to coalition President Denise Payne, can “instantly make this summer’s vacation more affordable by eradicating the AirBnB tax on renters who choose the Jersey Shore as their vacation destination through personal bookings.”
“Summer tourism is the heartbeat of the shore, and this law was never intended to hurt the private homeowners who help it grow and thrive,” reads a statement Thursday from the Assembly Democrats Office.
Halvorsen – NJBIZ
“The legislation approved today will help property owners who rely on word of mouth, signs, social media and longstanding customers to keep their rentals booked through the summer,” the statement continues.
Still, the measure drew out the wariness of the New Jersey Restaurant and Hospitality Association, as well as AirBnB itself, which was supportive of the tax levy when it was approved last year.
“Tax fairness, we feel is important. If you’re going to act like a hotel, you should be paying the same taxes like a hotel,” NJRHA President and Chief Executive Officer Marilou Halvorsen told NJBIZ in April.
“I think the idea [was] this would apply to all short-term rentals to ensure that everyone can benefit from the growth in the short-term rental industry,” said an AirBnB official.
