Shore house tax may be rolled back – but maybe after summer
Lawmakers took a first step Monday toward removing sales and occupancy taxes from short-term home rentals directly booked by homeowners, although it appears unlikely the change will be in place for Shore houses this summer.
A law that took effect last October that was written with online marketplaces like Airbnb in mind also applies to rentals directly booked by owners, sometimes with the help of Facebook groups, classified ads or even lawn signs.
Sen. Vin Gopal, D-Monmouth, said that should apply only to marketplaces where a person books and pays for a place.
“I’ve had some constituents reach out, own a shore home. They’ve rented it out to the same person year after year. I don’t think those folks is who that tax was intended for,” Gopal said.
A substitute version of Gopal’s S3158 was endorsed Monday by the Senate Community and Urban Affairs Committee. The Assembly committee to which the bill is assigned didn’t meet Monday on its scheduled date. It is next due to meet on June 6. Gopal said the bill could pass next month.
“Cautiously optimistic. We’re pushing,” Gopal said. “Everyone’s been responsive. There are more changes we need to do. And I think once we go through these changes, hopefully we can help a few folks out.”
Advocates for the change in the law, in particular a group of homeowners calling themselves the New Jersey Shore Rentals Coalition, continue to hold out hope the imposition of the taxes will be abolished in time for this summer, but that appears unlikely.
The current version of the legislature would be inoperative until the first day of the first calendar quarter beginning at least 60 days after the bill is enacted into law – meaning, Oct. 1 at the earliest.
Duane Watlington said he’s having a “really hard time” renting out his Shore house on Long Beach Island. He blames the sales and occupancy taxes now levied, which add nearly 12 percent to the cost.
“We still have openings in our house this year, and in the past we’ve always been fully booked by now,” Watlington said. “When I talk to people about renting, they say that with the cost of this tax, it’s just making it too expensive for them to continue to vacation with us.”
Watlington said the new taxes could in turn hurt Shore boardwalks, restaurants and other businesses, even if people do head to the beach for vacation anyway, by reducing the amount of spending money they have available.
“We’re the canaries in the coal mine here for our Jersey Shore and for the Shore tourism this summer. We’re seeing it right now with the bookings not happening,” Watlington said.
The changes being considered wouldn’t eliminate the taxes from being applied to transient rentals booked and paid for through marketplaces like Airbnb.
Groups such as the New Jersey Hotel & Lodging Association, which pushed for the Airbnb tax, are opposed to the proposed bill.