Airbnb Free of New Jersey Sales, Hotel Tax

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By Gerald B. Silverman

Short-term rentals through Airbnb Inc. and other home-sharing companies will continue to be excluded from New Jersey’s sales and use and hotel occupancy taxes.

Gov. Chris Christie (R) vetoed a bill ( A. 4587) on July 21, saying in his veto message that he wouldn’t levy new taxes on “already overly taxed New Jersey property owners.”

While the bill would’ve imposed at least $6 million in new taxes on Airbnb rentals, the company actually supported the bill. The hotel industry also supported the measure.

“We are extremely disappointed the governor decided to veto a bill that would have generated millions of dollars for Garden State residents without raising taxes,” Airbnb said in a statement.

Tourism Areas

The bill would have subjected “transient accommodations” to the state’s 6.875 percent sales tax and the 5 percent hotel and motel occupancy fee. It also would have allowed local governments to impose certain local taxes.

According to Bloomberg BNA’s 2017 Survey of State Tax Departments, 15 states impose tax collection obligations on Airbnb and other third-party companies that facilitate reservations for short-term accommodations. Owners of short-term accommodations are responsible for sales tax collection in 25 states.

“The tax increase proposed in this bill would not only impact New Jersey property owners who have—for generations— made their homes available for short-term rentals, but would also disproportionately increase the cost of visiting New Jersey shore towns and other tourist destinations,” Christie said.

“This area and its economy cannot and should not be jeopardized,” he said. “I cannot sign a bill increasing taxes on our citizens and, most particularly, our tourism areas.”

To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y., at GSilverman@bna.com

To contact the editor responsible for this story: Jennifer McLoughlin at jmcloughlin@bna.com

For More Information

Text of A. 4587 is at http://src.bna.com/q0h.Text of the veto message is at http://src.bna.com/q.

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