Gov. Phil Murphy approved a measure on Friday that would eliminate a controversial and unintended tax levied against the owners of shore homes who rent directly to summer tourists.
“Our shore economy adds tremendous vitality and dynamism to New Jersey,” Murphy said in a written statement. “Access to affordable rental properties for visitors and income on rentals for homeowners are the backbone of that economy.”
The tax, a part of the 2019 budget, levied an 11.65 percent rate on any rental under 90 days — primarily crafted with AirBnBs in mind. But summer rentals, which typically last a week, were also hit.
Under Assembly Bill 4814, the tax would only be levied against rentals obtained mainly through online marketplaces, such as AirBnB. 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.
Sen. Declan O’Scanlon speaks during the Senate Health, Human Services and Senior Citizens Committee meeting regarding medical cannabis on May 20, 2019. – AARON HOUSTON
The governor’s office said that A4814 would “closely mirror the original intent” of the new tax, “which was to create parity throughout the rental industry by extending the existing tax on hotels” to AirBnB rentals.
Murphy’s approval of the bill today drew the ire Republican lawmakers who, while happy he signed the measure, said it was “too little too late” given that the summer is drawing to a close.
“Summer is nearly over and most of the damage of this ill-conceived aspect of this tax has been done,” reads a Friday statement from Sen. Declan O’Scanlon, R-13th District. “This was a total failure of administrative planning and it likely, needlessly cost the New Jersey economy millions of dollars.”
But Murphy has pushed back against that narrative, saying as recently as Thursday night on his “Ask Governor Murphy” segment on News 12 that there has been “overwhelming evidence that this might be the best summer” for Jersey Shore businesses.
