NJ – More Shore Town Permit Daily and Weekly Rentals

Vacation Rentals and Sales Tax in NJ

By David Dorfman, Publisher RentLaw.com

More shore towns are “allowing” what has been happening for years – daily or weekly rentals.

Most communities along the New Jersey shore are known to host Summer Rentals. The summer rental season typically runs from Memorial Day (or a week before) to Labor Day. The period in between we refer to as our “Winter Season”.

During the Winter season, some landlords continue to get extra income, renting out their unit(s) for this time period. As a condition to rent many of the communities require :

  • Annual Landlord Registration (and a fee that varies from town to town)

  • Certificate of Occupancy Inspection (and a fee that varies from town to town)

  • Other Inspection Fees that may include a Fire-Smoke Detector Fee

  • Some communities may also charge a Seasonal Registration Fee

Many towns, in an attempt to limit transient (constant turnover like a hotel) have limited rentals to just two per season which in turn eliminates weekly or daily rentals.

With the increase in “sharing” sites such as AirBnB, some towns like Asbury Park, have begun to allow landlords to apply for a SEASONAL license. What this means is the landlord has to apply just ONCE per season and pay the fee. This ELIMINATES the requirement of a regular Certificate of Occupancy which is normally required upon a change in tenancy.

As of today, there are no towns (nor is state as far as I know as of today), charging a sales tax. But as the landlord or host, YOU ARE REQUIRED TO REPORT THIS AS INCOME on your tax return (state or fed) . Now, don’t be stupid. If you take a booking through AirBnB, HomeAway or any other booking site, they have your information about your booking and your income.

AirBnb and other sites have made major agreements with state, counties and local taxing jurisdictions to collect and remit taxes ON YOUR BEHALF.

While there are no jurisdictions in New Jersey directly collecting Sales Tax on Vacation Rentals, this may be happening soon.

I wrote about the State of Florida and the City of Fort Lauderdale here.