From the Star Ledger:
Former state Sen. Ray Lesniak recalls that when he was a kid his family would head down to Wildwood every summer looking for a vacation rental.
“We’d just knock on doors and find a place a place to rent,” said the Democrat from Elizabeth. “We would just go there blind. Because my dad didn’t like to go out for dinner, we needed an efficiency.”
They always found one, he said.
That might be a bit tougher for similar families next summer thanks to a bill that was passed in the hectic final hours of the budget negotiations in July.
During the debate over which new taxes to include, Senate President Steve Sweeney had proposed that the state impose new taxes on summer rentals.
Gov. Phil Murphy wanted an increase in the so-called “millionaire’s tax” instead.
Eventually they compromised on a bill that would impose a tax only on rentals that go through such online services as AirBnB. That’s what the newspapers reported at the time anyway.
“A tax on shore rentals, floated by Senate President Steve Sweeney last week, was not part of the budget deal, much to the relief of officials and second-home owners in Atlantic and Cape May counties,” said the Press of Atlantic City.
The reason those Shore residents were relieved was obvious. Such a tax would not only increase the cost of summer rentals by almost 12 percent; it would also create a paperwork nightmare for homeowners.
That nightmare begins Oct. 1, despite the deal the newspapers reported. Or so says the Treasury Department.
On Aug. 14 the department sent out an advisory stating that the tax applies not just to internet rentals, but also to “rentals that are made directly by the homeowner.”
As of Oct. 1, those lucky homeowners will have to start collecting state sales tax of 6.625 percent as well as a “state occupancy fee” of 5 percent.
They also have to register with the state Division of Revenue and Enterprise Services and maintain four years’ worth of records on the rentals.
There’s one exception: real estate agents. Somehow their lobby got the bill’s sponsors to exempt them from any tax.