From the Star Ledger:
A new tax in New Jersey on short-term lodging such as Airbnb rentals is rattling some property owners and renters who worry that it could deal a blow to the state’s multi-billion dollar shore tourism industry by pushing people to consider other destinations.
Democratic Gov. Phil Murphy proposed extending the state’s sales and occupancy tax to transient accommodations like Airbnb and VRBO rentals during last year’s budget process, and it flew largely under the radar as Murphy and the Democrat-led Legislature scrapped over bigger taxes such as income taxes and corporate business rates.
But since the 11.625 percent tax — higher in some towns that have their own fees — went into effect late last year, a group of property owners, some from Pennsylvania and New York, have taken their concerns to lawmakers.
The issue is rising to the surface now in particular because many shore rentals are locked up in January. The new tax law requires property owners who let out their homes, including vacation properties along the state’s roughly 130-mile coastline, to collect the tax from short-term renters. In many cases, this is affecting owners and renters who have long-standing arrangements, or who rent by word of mouth or via informal social media posts.
Just how many people the new tax will affect is unclear. Payne says the coalition estimates that it could be as high as 6,000. A legislative estimate that accompanied the bill found it would bring in an indeterminate amount of cash.
The state’s tourism website estimates overall the shore saw 100 million visitors in 2017 and accounted for about $43 billion in spending.
Murphy’s administration defended the tax as a way to “level the playing field” between hotels, motels and transient accommodations done through online marketplaces like Airbnb, according to a statement from treasury spokeswoman Jennifer Sciortino.
She also pointed out that the law offers short-term renters a way around the tax since transactions through real estate agents are exempt from the tax. That’s a point that rankles owners. Payne called it “discriminatory” and said many owners prefer to deal with their guests directly.
Kathy Coccia, 68, is a retired grandmother from Cranford, New Jersey, and has been renting a vacation house in Avalon along with her husband, daughter, son-in-law and two grandkids for the past 10 years. This year, though, when she called to inquire about renting the shore house, she said she was stunned to learn about New Jersey’s new tax on certain rental properties.
She said she and her family are considering another destination.
“I feel I’m being taken advantage of,” she said. “It’s a lot. New Jersey asks a lot of its homeowners.”