Michael Symons, New Jersey 101.5
New Jersey lawmakers are moving ahead with plans to tax and regulate home-sharing operations like Airbnb. And while the company is OK with collecting taxes, it doesn’t like the approach being taken to license or prohibit the short-term rentals it brokers.
Assemblywoman Annette Quijano, D-Union, said New Jersey’s tax laws need to be updated to keep up with technology and the home-sharing portion of the hospitality industry.
“It’s unfair to hotels and motels that have to compete with a new business model that provides essentially the same service but does not have to charge state sales tax, the state hotel/motel fee and a municipal hotel tax, which can total up to 18 percent in some areas,” Quijano said. “That’s a very significant disparity and a significant barrier to overcome.”
Last year, more than 6,000 New Jersey hosts earned over $50 million through 257,000 short-term rentals arranged through Airbnb.
Such rentals should have to pay the same taxes as hotels, said Marilou Halvorsen, president of the New Jersey Restaurant & Hospitality Association.
“We as an organization don’t normally believe in new taxes. However, if you are conducting your business like a hotel, you’re operating like a hotel, you are in the lodging business, and we feel you should have the same obligations as traditional lodging facilities,” Halvorsen said.
Airbnb used to resist all government interventions with its business model but has altered that approach. Company spokesman Peter Schottenfels said it collects and remits taxes to more than 230 municipalities, states and cities worldwide, including 16 states in the United States.
“We are in full support of efforts to collect and remit taxes on behalf of our host community. We want to make sure that our hosts are paying their fair share of taxes,” said Schottenfels, who said the state law could ensure compliance and eliminate paperwork.
While Airbnb supports the tax bill, A4587, which was advanced by the Assembly tourism committee in a 5-2 vote, it’s resisting a companion bill that would set up rules for cities and towns to regulate the home-sharing economy.
Assemblywoman Valerie Vainieri Huttle, D-Bergen, said she hopes the tax bill acts an incentive to municipalities to allow the short-term home rentals. But around 17 municipalities – including eight of the 13 in her legislative district – have effectively banned them by requiring minimum stays of 30 days.
She is sponsoring a second bill, which was advanced unanimously by the Assembly tourism committee, which would let municipalities license short-term home rentals or ban the practice. It would not apply to seasonal rentals at the Shore.
“We support Airbnbs and other transient marketplaces. However, when we hear the word business, and a growing business, there needs to be some safeguards and regulations in place,” Vainieri Huttle said.
Under the bill, A4441, people couldn’t offer their homes for short-term rentals unless they register with their municipality; those that don’t could be fined $100 a day. If homeowners weren’t present, they couldn’t rent out a home through a transient marketplace for more than 30 days a year. People who own a multiple dwelling could register only a single unit.
Vainieri Huttle likened it to registries for pets or apartments.
“If we are in a single-family zoned neighborhood and you have an Airbnb coming in, you’re literally actually having a hotel right next to your house,” Vainieri Huttle said. “Not that we want to ban that, but we want to know who’s coming into the neighborhoods.”
Schottensfels of Airbnb said the company favors regulations but not the version moving in Trenton.
“I understand that it is permissive, but I think that there are parts of the bills that it could be made more clear that it is permissive instead of mandatory,” said Schottensfels, who also called the registration mandate restrictive.
“There are some really good things happening in New Jersey, especially in Jersey City, other towns along the Shore that have really benefited from the home-sharing community,” he said. “We want to make sure that towns have that option and that they have a full range of flexibility in how they want to regulate the home-sharing economy.”
Joe Simonetta, a lobbyist for the New Jersey Hotel & Lodging Association, said the tourism industry supports home-sharing sites but that “the Uber of property rentals” needs regulation.
“People are renting these places for a night or two nights and then putting a party invite online. Next thing you know the neighborhood is inundated with a hundred, 150 cars,” Simonetta said.
“This goes a long way in monitoring the use and also gives municipalities the ability to say whether or not they want this in their neighborhood,” he said.
Schottensfels says the company makes efforts to prevent problems, like a ‘neighbors’ tool through which people can report suspected misuse.
“We use sophisticated technologies, including searches of public databases to make sure that the right people are using our platform and that the wrong people are not allowed to,” Schottenfels said.