Bill Exempts Certain Rental Transactions from Taxes on Occupancy Charges
TRENTON – Governor Phil Murphy today signed legislation (A-4814) amending the transient accommodations law enacted last summer to provide relief for many shore renters by narrowing the scope of rentals that are subject to taxation.
The administration conducted a thorough legal and technical review to ensure that the legislation, as written, was not only feasible to implement, but more closely mirrors the original intent, which was to create parity throughout the rental industry by extending the existing tax on hotels and motels to certain short-term rentals, such as those done through online marketplaces.
“Our shore economy adds tremendous vitality and dynamism to New Jersey,” said Governor Murphy. “Access to affordable rental properties for visitors and income on rentals for homeowners are the backbone of that economy. Our public policies must be well-calibrated to allow this economy to thrive and grow.”
The amendment limits the scope of transient accommodations that are considered taxable under the law (P.L.2018, c.49) passed last year to apply only to rentals of professionally managed units and rentals obtained through a transient space marketplace or travel agency, under certain circumstances. Under the amendment, rentals that a homeowner facilitates directly, such as through local newspaper ads, personal referrals, or signage, will not be subject to the tax if the homeowner is collecting the rental payment themselves.
Primary sponsors of the legislation include Assembly members Joann Downey, John McKeon, John Armato, Bruce Land, Wayne DeAngelo, Eric Houghtaling, Vincent Mazzeo, Nancy Pinkin, Matthew Milam, Valerie Vainieri Huttle, and Senators Vin Gopal and Bob Andrzejczak.
“Over the past several months, we’ve listened to Jersey Shore homeowners – many of whom are still recovering from Hurricane Sandy – who are worried they’ll see far less summer guests this season as a result of the short term rental tax. 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,” said Assembly Bill sponsors in a joint statement.
“The bill signed into law 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. It will help shore businesses keep customers flocking to their doors. And it will help tourists afford to have the vacation of their dreams right here at the Jersey Shore,” the sponsors continued.
"The summer rental business is a foundation of Monmouth County's economy," said Senator Vin Gopal. "As the 7th-largest employer in New Jersey, tourism has always been one of the Jersey Shore's flagship enterprises. At a time of year when business should be booming, local homeowners have been struggling to fill rental slots for summer visitors. A bad summer at the shore could have a damaging ripple effect across our State’s entire economy, which is why this reform works to protect our traditional rental markets from the harmful provisions of this new tax, ensuring a brighter future for summer rentals up and down the coast."
“The law was originally intended to apply to major commercial companies such as Airbnb but it ended up hurting private renters up and down the shore,” said Senator Bob Andrzejczak. “Folks that have been renting their shore homes to the same families for years aren’t doing it to make a fortune but more so to offset the cost of home ownership. The original law was never meant to hurt independent renters and luckily this legislation will correct things so that it no longer does. I am grateful Governor Murphy saw the value in this and took action on the
Local officials also touted the measure.
“I am happy to hear that Governor Murphy has repealed the Shore Rental Tax for Mom and Pop renters. These "word of mouth" rentals help people hold onto homes that have been families for generations. Hopefully this is a start for bipartisan support in Trenton for additional tax relief for NJ,” said Brick Mayor John Ducey.
“This legislation strikes the perfect balance between homeowners and loyal visitors,” said Bradley Beach Mayor Gary Englestad.
“Atlantic City and other shore towns are always sensitive to the needs of both residents and visitors, said Atlantic City Mayor Frank Gilliam. “The NJ Assembly bill regarding the short term rental tax is a step in the right direction. My administration hopes that the constituents feel that we are trying to balance what is important to residents with the what is important to the business community which fuels our economy in the summer season.”
“I, Mayor John Pallone of the City of Long Branch, support Bill A4814. Thank you to Governor Phil Murphy, Senator Vin Gopal, and Assembly Members Eric Houghtaling and Joann Downey for supporting this bill,” said Long Branch Mayor John Pallone.
“The bill that Governor Murphy signed today supports the people and businesses that make Point Pleasant Beach not only a great place to vacation, but a great community in which to live,” said Point Pleasant Beach Mayor Stephen Reid. “I look forward to the benefits that our community, and our Shore, will see.”
“Tourism is an integral part of the Wildwood community and is one that will prosper under this new legislation. I thank Governor Murphy for his willingness to help our community investing in the tourists, residents, and businesses of the Jersey Shore,” said Wildwood Mayor Ernest Troiano Jr.
“I am thrilled to see Governor Murphy sign legislation that will help stimulate tourism at the Jersey Shore, said Seaside Heights Mayor Tony Vaz. “Our tourists are a vital aspect of our local economy, and serve as the fuel that determines the success of the Seaside Heights community.”
Advocates for the rental community also praised the legislation.
“The NJ Shore Rentals Coalition is deeply gratified for the Governor's decision to keep vacations at the shore affordable,” said Denise Payne, President of the NJ Shore Rentals Coalition. “By signing this bill into law the Governor is both proving New Jersey is a tourism friendly state and protecting the integrity of the business economy along the shore. The Coalition applauds the efforts of lawmakers throughout the state who recognized that this tax law needed to be corrected and worked together to make it happen.”