N.J. bill seeks to regulate Airbnb-type rentals

John C. Ensslin, The Record

New Jersey vacation rentals booked through online services such as Airbnb would be subject to the same state and local occupancy taxes as hotel and motel rooms under a bill introduced in state Assembly.

Assemblywomen Valerie Vainieri Huttle, D-Englewood, and Annette Quijano, D-Union, have co-sponsored the measure, which would impose on these rentals a 7 percent sales tax, a 5 percent occupancy fee and up to a 6 percent municipal occupancy tax — the same as motels and hotel pay.

“This is all about fairness,” Quijano said in a prepared statement. “We are trying to stay on top of technological advances in business, and how they impact brick-and-mortar companies and our economy.”

“There is nothing fair about one company having to pay certain fees while another one that provides essentially the same service is exempt,” Quijano said.

"While we have not yet seen this specific legislation, 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," Josh Meltzer, regional head of public policy for Airbnb, said in a prepared statement.

On its website, Airbnb tells people renting out their property that such rentals can be subject to occupancy tax and that “the obligation to remit the taxes to the government usually falls on the host.”

The Assembly measure, introduced Monday, is the legislature’s latest attempt to regulate the so-called sharing economy services provided by individuals through online services and mobile phone applications.

Lawmakers have been trying for nearly two years to come up with regulations on ride-hailing services such as Uber and Lyft.

This latest proposal comes after Airbnb officials reached agreements with officials in Jersey City and Newark that allow residents to rent out their homes through the online service while imposing a 6 percent municipal occupancy tax.

Jersey City was the first city in New Jersey to enact such a law, late last year. Newark approved a similar law earlier this year.

Jersey City Mayor Steve Fulop said Tuesday that in the first six months after the law went into effect, the city took in about $250,000 in additional hotel tax revenue.

“My general perspective is you need to figure out a way as a municipality to work with technology and not fight technology,” Fulop said.

On any given day, Fulop said there are about 400 Jersey City locations available on Airbnb.

“It’s essentially as if we created a whole new large hotel without construction,” he added.

Huttle cited the Jersey City and Newark agreements as part of the reason to create a statewide standard.

She also said that within the last month, her office has fielded calls from people in three towns in her district —  Cresskill, Fort Lee and Leonia —  that raised concerns about Airbnb rentals.

“We are currently looking into potential regulations for this type of short-term rental,” she said in an email. “But this is a good start to the process.”

The proposed tax would not apply to people who collect less than $1,000 in gross revenue on short-term online rentals of their property within one year.

The measure also authorizes the director of the Division of Taxation to enter into an agreement with the owner or operator of such an online marketplace for the purpose of collecting and paying the tax.