Jersey Shore tax rolled back for some rentals

A measure of relief has arrived for New Jersey Shore homeowners who say they’ve been hurt by the state’s 2018 short-term rental tax.

Gov. Phil Murphy signed legislation Friday that will exempt rentals arranged directly between the owner and a renter from the more than 11% sales and occupancy tax. That means informal transactions, such as those made through newspaper ads, Facebook, word-of-mouth, or personal referrals, won’t be subject to the fee.

The amendment to the tax does not apply to rentals through websites such as Airbnb or Vrbo, which will remain subject to the tax.

“The original bill failed to consider the potential danger to property owners who earn a living by selling short-term rentals through traditional informal means, like classifieds or shared social circles,” Assemblyman Eric Houghtaling (D., Monmouth), who sponsored the bill, said Friday. “This new law will help those property owners keep their rentals booked through the summer, both for the last few weeks of this year’s season and for every summer to come."

Some owners of Shore homes have said they’ve lost money and rentals due to the tax, which was passed to make Airbnb-style rentals subject to the same tax as hotel stays.

While the number of Airbnb stays went up this summer, the number of vacancies showed by Vacation Rentals LBI tripled, according to data from the companies.

“I’m really having a hard time this year because of this tax,” Long Beach Island homeowner Duane Watlington told a Senate committee in the spring. “In the past, we’ve always been fully booked by now.”

The NJ Shore Rentals Coalition, an advocacy group, said in a statement released by the governor’s office that the change to the law would protect the Shore’s economy

“This law was never intended to hurt the private homeowners who help [tourism] grow and thrive,” Assembly members who sponsored the bill said in a joint statement.

The bill had been waiting for Murphy’s signature, but last month, the governor indicated he was taking his time, saying on a radio show that “places up and down the Shore are well-rented and well sold-out.”

On Friday, Murphy said: “Access to affordable rental properties for visitors and income on rentals for homeowners are the backbone of [the Shore] economy. Our public policies must be well-calibrated to allow this economy to thrive and grow."