TRENTON, NJ — With less than a month left in the prime summer rental season, vacationers who rent directly from shore homeowners will not have to pay 11.6 percent in state sales and occupancy taxes.
Gov. Phil Murphy has signed a measure that requires transient accommodations only be subject to the taxes if the rental is obtained through online marketplaces, like AirBnB and VRBO — and not through individuals homeowners who rely on word of mouth, signs, social media and longstanding customers to keep their rentals booked.
Unanimously approved by both the state House and Senate in July, the measure had been awaiting the governor’s signature as the days of summer ticked down.
“Our shore economy adds tremendous vitality and dynamism to New Jersey,” Murphy said in a press release. “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.”
When state lawmakers approved a new tax on short-term vacation rentals in 2018, it was only to apply to online services — or that’s what everyone thought until the tax actually took effect in October and individual homeowners who book their own summer vacationers learned that they also would be required to collect the hefty taxes from short-term renters.
The revelation triggered the formation of New Jersey Shore Rentals Coalition, a group of vacation homeowners that has been the impetus behind the revised law. While pleased with the news, they will not reap the full benefits until next year — many hoping to rebound from a disappointing summer of reduced rentals as vacationers took their business to other destinations along the East Coast.
“The New Jersey Shore Rentals Coalition is deeply gratified for the governor's decision to keep vacations at the shore affordable," said Denise Payne, president of the nonprofit 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."