Taxes, fees for online accommodations crucial to shore

Our View, Press of Atlantic City

Illegal room and apartment rentals through online services are a significant threat to the Jersey Shore tourism industry.

Since these rogue operations through internet-based facilitators such as Airbnb aren't licensed, inspected or paying taxes and fees, they have a competitive cost advantage over legitimate hotels, motels and apartment complexes.

They're siphoning off revenue needed by the legal hospitality industry to maintain the high standards of appearance and services needed for the shore to remain an appealing destination.

They're also cheating the state's taxpayers, by benefiting from municipal and state services without paying for them.
State legislators finally are taking the first steps to address this lawless pillaging of the hospitality industry and the shore economy. Two Assembly members - Annette Quijano, D-Union, and Valerie Vainieri Huttle, D-Bergen - are introducing a bill to apply regular taxes and fees to short-term, online house and room rentals.

Under their proposal, whose language is still being worked out, users of Airbnb-type services would pay a 7 percent sales and use tax and a 5 percent transient accommodation fee. Certain municipalities would be authorized to impose a 3 percent accommodation tax.

Quijano put it succinctly in announcing the legislation: "There is nothing fair about one company having to pay certain fees while another one that provides essentially the same service is exempt."

Two N.J. cities led the way the past year by starting to tax Airbnb users on their own. Jersey City and Newark both imposed a 6 percent municipal occupancy tax. Jersey City Mayor Steve Fulop said that in the first six months, his city took in $250,000 in additional hotel-tax revenue.

The Assembly bill would exempt property owners who had less than $1,000 in revenue the past 12 months, but would authorize the Division of Taxation to establish agreements for the collection of the taxes and fees. We hope this means online room and apartment landlords must register or pay penalties if they don't.

Users of Airbnb already pay hefty fees, but to the San Francisco-based corporation, which takes a 3 percent cut of each booking and a 6 to 12 percent fee from guests.

The company is valued at $30 billion (yet employs fewer than 3,000), so it has a lot of resources to persuade governments to accommodate it.

We urge South Jersey legislators to look out for the health of the Jersey Shore tourism industry and support this effort to level the competitive field in hospitality.

Our view