In N.J., Airbnb may not always be tax-free

Samantha Marcus, NJ Advance Media for NJ.com

A bill to treat and tax such online short-term rental marketplaces as Airbnb like other hotels and motels passed the state Assembly on Monday.

The bill's sponsors say these "transient accommodations" have enjoyed special status in New Jersey, while more traditional lodging providers are regulated and subject to taxes.

"We can't allow rules to apply to one business but not another when they essentially provide the same services," Assemblywoman Valerie Vainieri Huttle (D-Bergen), a sponsor, said in a statement. "Accommodations booked through sites like Airbnb are used like hotel rooms. They should be subject to the same obligation."

Such marketplaces have gained popularity in recent years, allowing people to list and book apartments, houses, villas, and even castles throughout the world for a night, a week, or a month. The most famous, Airbnb, boasts listings in 65,000 cities and 191 countries.

In New Jersey, about 6,100 residents hosted sites through Airbnb last year, renting to about 257,000 people. That resulted in $50 million in income for the renters, the company said.

But critics say hotels and the housing market are taking a hit because of the services, while some municipalities in New Jersey have passed ordinances to restrict the marketplaces out of fear they are compromising safety and the quality of life in their towns.

Sponsors say New Jersey's laws must be updated to keep up with changing technology.

Under current state law, the state imposes sales and use taxes, as well as hotel and motel occupancy fees, for each occupied room. It also allows some municipalities to impose various taxes and fees.

The bill (4587) passed 46-28. If passed by the Senate and signed by the governor, online rentals would be subject to the same taxes.

According to the legislation, the online marketplace would collect the taxes and fees and pass it to the state or municipality.

The Office of Legislative Services said it could not estimate how much revenue the change could mean for the state. But based on Airbnb's announcement that renters here had earned more than $50 million, the state's take would have been about $6 million. That doesn't include other purveyors of online rentals.

In a statement, Airbnb's head of Northeast public policy, Josh Meltzer, said the company looks "forward to collecting millions of dollars in tax revenue on behalf of the Airbnb community in New Jersey."

NJ Advance Media Staff Writer Brent Johnson contributed to this report.