Measure to tax Airbnb, short-term rentals advances

Nicholas Pugliese, NorthJersey.com

Short-term housing rentals through Airbnb and other online marketplaces could soon be subject to the same taxes as hotels and motels in New Jersey, under a bill approved by the Assembly Budget Committee on Wednesday.

The measure would raise $6 million in revenue annually from Airbnb alone, according to an estimate from the nonpartisan Office of Legislative Services, but would also push up prices for people using the service by as much as 18 percent.

Another bill related to Airbnb that would require hosts to register with their municipality before listing a short-term rental was not considered Wednesday even though its sponsor said it was “gaining momentum.”

irbnb has become a controversial topic in New Jersey, where the company says there were roughly 6,000 active hosts who earned more than $50 million in 2016. Founded in 2008 and based in San Francisco, Airbnb now has more than 2.5 million users worldwide and values itself at $30 billion.

But its fast growth has been met with resistance from communities and its rivals in the hotel industry, who say the short-term-rental industry is hurting hotels and the housing market, as well as eroding the quality of life in neighborhoods.

Closter was the latest of several municipalities in North Jersey to ban rentals shorter than 30 days, citing quality-of-life concerns.

The bill that advanced Wednesday, A-4587, would not impose new restrictions on Airbnb and other “transient space marketplaces.” Rather, it would make rentals through those services subject, for the first time, to the state’s 6.875 sales and use tax and its 5 percent hotel and motel occupancy fee.

Municipalities and special jurisdictions like the Meadowlands District can impose additional occupancy taxes, with the total levy not to exceed 18 percent, said the bill's sponsor, Assemblywoman Annette Quijano, D-Union.

“It’s really about fairness,” Quijano said, adding that Airbnb currently enjoys a “huge competitive advantage” over hotels by virtue of not having to pay those taxes.

The measure is supported by the New Jersey League of Municipalities, New Jersey Hotel and Restaurant Association, New Jersey Realtors Association and Airbnb itself, which says it has tax agreements with more than 250 jurisdictions across the country, including Jersey City.

Transient accommodations booked through a real estate broker would be exempt under the bill, a companion version of which has not been introduced in the Senate.

Another, more controversial bill related to short-term rentals, A-4441, was not considered by the Assembly budget panel Wednesday but is likely to be debated again before the end of the year, said its sponsor, Assemblywoman Valerie Vainieri Huttle, D-Englewood.

The measure would establish a statewide regulatory framework for short-term rentals where none currently exists. It would codify that municipalities are authorized to prohibit such rentals and would require anyone who wants to offer a short-term rental to first register with their municipality, among other restrictions.

Huttle said the growing number of North Jersey municipalities that have placed restrictions on short-term rentals shows that her bill is “gaining momentum.”

Airbnb has come out in opposition to that measure, with a spokesman calling it “a solution in search of a problem.”

Email: pugliese@northjersey.com