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Division of Taxation

Municipal Occupancy Tax

Any New Jersey municipality, other than Newark, Jersey City, Atlantic City, Elizabeth, Wildwood, North Wildwood, and Wildwood Crest is authorized to amend or adopt an ordinance to impose a Municipal Occupancy Tax of up to 3% on charges for hotel and motel occupancies in that municipality. The Municipal Occupancy Tax is in addition to the State Occupancy Fee and the New Jersey Sales Tax.

Newark, Jersey City, Atlantic City, Elizabeth, Wildwood, North Wildwood, and Wildwood Crest are prohibited from enacting a Municipal Occupancy Tax because those municipalities already impose local taxes or fees on such occupancies.

The majority of municipalities that have adopted a Municipal Occupancy Tax have authorized the tax at a rate of 3%. However, West Long Branch Borough (Monmouth County) and Berkeley Township (Ocean County), impose the tax at the rate of 2%.

The Municipal Occupancy Tax List shows the municipalities that have adopted this tax and the applicable rate.

Local Ordinance Information

Adopted Municipal Ordinances must be sent to:

  • New Jersey Division of Taxation
    Office of Legislative Analysis
    P.O. Box 240
    Trenton, NJ 08695-0240

The ordinance must be accompanied by a list of names and addresses of the hotels and motels within the municipality. The municipality will receive a letter acknowledging receipt of the ordinance and noting the effective date of the Municipal Occupancy Tax.

Note: The tax is effective on the first day of the first full month following 90 days after the Division has received the adopted ordinance. Questions concerning the municipal ordinance should be directed to the municipality.

Billing and Remitting

The Municipal Occupancy Tax is imposed directly on the occupant and must be separately stated as “Municipal Occupancy Tax” on any bill, invoice, or other document provided to the occupant.

Note: Sometimes a hotel or motel will sell package deals that include other components, such as meals, tickets, admissions, transportation, etc. In that case, the Municipal Occupancy Tax should be charged only on the amount related to the room/lodging facility occupancy. However, when a continental breakfast or similar complementary service is offered, it is considered included in the room price and, therefore, is subject to the Municipal Occupancy Tax.

The hotel or motel must file Form HM-100 monthly to remit the Municipal Occupancy Tax collected. The hotel or motel must keep detailed and accurate records of all transactions.

Exemptions from the Tax

The Municipal Occupancy Tax is not imposed when:

  • The occupant is a New Jersey State or federal agency, instrumentality, or political subdivision; the United Nations; or any other international organization of which the United States is a member as long as the occupancy is paid with government funds;
  • The space is rented for the purpose of assembly (e.g. a meeting, seminar, wedding, etc.);
  • The occupancy lasts for at least 90 consecutive days (permanent resident exemption).

Last Updated: Wednesday, 05/11/22