New Jersey Expands Tax Base for Occupancy Taxes

Enacted legislation imposes New Jersey state sales and use tax and hotel/motel occupancy fees on transient accommodations. Also, the bill authorizes municipalities to impose the taxes and fees on transient accommodations.

Marketplaces for Online Room Rentals

Transient space marketplaces are required to collect and pay New Jersey taxes on transactions made through the marketplace. The transaction may involve a “transient accommodation” or a hotel room. The marketplace collects the taxes on behalf of persons who rent transient accommodations or hotel rooms via the marketplace.

What Accommodations are Taxable?

“Transient space marketplace” means an online marketplace through which a person may offer transient accommodations or hotel rooms to individuals. It allows transient accommodations or hotel rooms to be advertised or listed through an online marketplace in exchange for consideration or provides a means for a customer to arrange for the occupancy of the transient accommodation or hotel room in exchange for consideration.

A transient space marketplace does not include an online marketplace operated by or on behalf of a hotel or hotel corporation that facilitates customer occupancy solely for the hotel or hotel corporation’s owned or managed hotels and franchisees.

“Transient accommodation” means a room, group of rooms, or other living or sleeping space for the lodging of occupants, including but not limited to residences or buildings used as residences. However, it does not include:

  • a hotel or hotel room;
  • a room, group of rooms, or other living or sleeping space used as a place of assembly;
  • a dormitory or other similar residential facility of an elementary or secondary school or a college or university;
  • a hospital, nursing home, or other similar residential facility of a provider of services for the care, support and treatment of individuals that is licensed by the state;
  • a campsite, cabin, lean-to, or other similar residential facility of a campground or an adult or youth camp;
  • a furnished or unfurnished private residential property (i.e., condominiums, bungalows, single-family homes and similar living units) where no common hotel services are made available (i.e., maid, room, or linen changing services) and where the keys to the property, whether a physical key, access to a keyless locking mechanism, or other means of physical ingress, are provided at the location of an offsite licensed real estate broker; or
  • leases of real property with a term of at least 90 consecutive days.

“Residence” means a house, condominium, or other residential dwelling unit in a building or structure that is designed, constructed, leased, rented, let or hired out, or otherwise made available for use as a residence.

Requirements Of Transient Space Marketplaces

For at least four years following the end of the calendar year in which the transaction occurred, the transient space marketplace must maintain the following data for those transactions consummated through the transient space marketplace:

  • the name of the person who provided the transient accommodation or hotel room;
  • the name of the customer who procured occupancy of the transient accommodation or hotel room;
  • the address, including any unit designation, of the transient accommodation or hotel room;
  • the dates and nightly rates for which the consumer procured occupancy of the transient accommodation or hotel room;
  • the municipal transient accommodation registration number, if applicable;
  • a statement as to whether such booking services will be provided in connection with
  • short-term rental of the entire unit,
  • short-term rental of only part of the unit, and/or
  • short-term rental of the entire unit, or part of it, in which a non-short-term occupant will continue to occupy the unit for the duration of the short-term rental;
  • the individualized name or number of each such advertisement or listing connected to such unit and the uniform resource locator (URL) for each such listing or advertisement, where applicable; and
  • such other information as the Division of Taxation may by rule require.

Permanent Residents And Charitable, Non-Profit Organizations

The bill treats permanent residents (i.e. any occupant of a transient accommodation for at least 90 consecutive days) and charitable, non-profit organizations that lease or rent transient accommodations consistent with how those individuals and organizations are treated for purposes of hotel and motel occupancies.

Local Occupancy Taxes

Local taxes passed by the legislation include:

  • Hotel Occupancy Tax;
  • Atlantic City Luxury Tax;
  • Atlantic City Promotion Fee;
  • Cape May County Tourism Sales Tax;
  • Cape May County Tourism Assessment;
  • Municipal Occupancy Tax;
  • Sports and Entertainment Facility Tax; and
  • Meadowlands Regional Hotel Use Assessment.

Ch. 49 (A.B. 1753), Laws 2018, effective October 1, 2018

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All stories by: CCHTaxGroup