Lawmakers introduce bill to impose statewide taxes on Airbnb hosts

Katherine Landergan, Politico New Jersey 

Lawmakers in Trenton have introduced a bill that would impose the first statewide taxes on Airbnb hosts in New Jersey.

If enacted, residents who rent out their properties through the website would be required to pay the same taxes and fees as hotels. The proposal, which does not yet appear online, comes just months after Newark and Jersey City agreed to tax Airbnb rentals like hotel rooms.

Assemblywoman Annette Quijano, a sponsor of the proposal, said in a statement that the taxes will generate some much needed revenue for the state and municipalities.

“This is all about fairness,” said Quijano, a Democrat from Union County. “There is nothing fair about one company having to pay certain fees while another one that provides essentially the same service is exempt.”

It’s unclear how much revenue the state could generate from these taxes, and no fiscal estimate was immediately available. But in Jersey City and Newark, city leaders have said the taxes could generate hundreds of thousands of dollars or more for their cities, according to NJ.com.

Hotels and motels in New Jersey are required to pay the state’s 7 percent sales tax and a 5 percent occupancy fee. Municipalities may levy an additional occupancy tax, up to 6 percent. 

The proposal (A4048), which is also sponsored by Assemblywoman Valerie Vainieri Huttle, would impose the sales tax and similar occupancy rates on hosts who offer short-term rentals through a “transient space marketplace.” The marketplace is defined as a digital platform where a person can offer accommodation to transient guests, in exchange for compensation. 

Under the proposal, Airbnb hosts would pay a 5 percent “transient accommodation fee.” Some municipalities would also be permitted to levy a 3 percent “transient accommodation tax” on specific charges. 

The legislation would not apply to hosts who made less than $1,000 per calendar year. It also does not apply to realtors. 

Josh Meltzer, regional head of public policy for Airbnb, said in a statement that the company had not seen the specific legislation, but “we generally support efforts that make it easier for our community to pay their fair share of taxes and look forward to working with the Assemblymembers on their bill.” 

The company says it now collects and remits taxes in 190 cities, states or other jurisdictions around the world. Airbnb has signaled a willingness to be taxed — such as releasing a report on how the company could generate $2 billion in tax revenue to American cities, or even asking lawmakers for permission to collect taxes. 

This proposal comes as negotiations to regulate Uber, another product of the “sharing economy,” continue to drag on in Trenton. For two years, lawmakers have fought to pass a bill that would implement statewide regulations. 

Quijano also said in the statement that it is critical for the state to stay abreast of technological advances in business. 

“This will ensure that all entities that are in the business of providing short-term rentals in New Jersey are paying their fair share of taxes …,” she said.