Lawmakers want to revise the Airbnb tax, signed into law as part of the 2019 budget package, after operators of many summer shore rentals said they were hit by the tax as an unintended consequence after it took effect Oct. 1.Lawmakers want to revise the Airbnb tax, signed into law as part of the 2019 budget package, after operators of many summer shore rentals said they were hit by the tax as an unintended consequence after it took effect Oct. 1.

Initially crafted to apply solely to Airbnb transactions, Assembly Bill 1753 established an Airbnb tax totaling 11.625 percent in most municipalities for “short-term rentals” under 90 days, with $15 million in anticipated revenue for the 2019 fiscal year.

Summer rentals typically last a week, so language was written into the law crafting an exemption that those taxes not be charged to rentals booked through a licensed real estate broker.

The problem, said Jersey Shore Renters’ Coalition Committee Member Tim Krug, is few summer rentals are done via a broker.

“Maybe 15 years ago that was how people did business, but in today’s day and age less than half of rentals are being booked” that way, Krug said. Many brokers charge their own fees, many in the range of 10 percent to 12 percent, which is then passed onto the renter, he added.

Krug, who also owns and operates the Beach Haven 7 rental property in Long Beach Island, said an average family that rents a three-bedroom house for a week at $3,000 would have to pay an additional $350 due to the tax.

“It’s not a tax on people who own second homes. This is a tax that’s being charged to renters, middle-class families — families that have been coming to the Jersey shore for years,” Krug said. “That’s their budget. Now these people are going to bring food from home. They’re not going to buy their LBI t-shirt or sweatshirt this year. Maybe they won’t play mini-golf. They won’t eat out.”

A representative of the Department of Treasury, which oversees the taxation division said, “Our goal from the onset was to level the playing field statewide between existing hotels and motels and transient accommodations conducted through new online marketplaces. However, the federal Internet Tax Freedom Act (ITFA) prohibits internet-only taxes.  While some who rent directly may be impacted by this provision, the law, as written, provides an exemption for a majority of reported short-term rentals. Taxation has posted guidance for anyone seeking clarity on the rules.”

Assembly Speaker Craig Coughlin, D-19th District, said at his monthly “Speak to the Speaker” radio segment Friday morning that he has been made aware of the consequence of the law.

“[The] new law that was passed as part of the state budget, the goal there was to ensure tax fairness between Airbnb rentals and hotels and motels who pay sales tax and hotel and motels [tax] to municipalities,” Coughlin said.