New Jersey considers taxing online home rentals

Phil Gregory, Newsworks

New Jersey could require home rental websites to pay the same state and local occupancy taxes as motels and hotels.

A legislative proposal calls for imposing a 7 percent sales tax and a 5 percent transient accommodation fee on rentals booked on those websites, said Assemblywoman Valerie Huttle. Municipalities could charge a 3 percent fee.

"More people are using online marketplaces like Airbnb to book their vacation rentals," she said. "It's important to have parity — not only to have everyone pay their fair share of taxes, but it also provides a much needed revenue boost to the state."

Two New Jersey cities already tax online marketplace Airbnb for short-term house and room rentals, according to Assemblywoman Annette Quijano.

"Jersey City and Newark are already doing it, but they're only doing it halfway," she said. "They're charging for the municipal tax, but they're not collecting any state taxes because there's no law that exists that would cover that purpose."

Some homeowners need the extra cash to make ends meet, Quijano said, and the legislation would apply only to those who collect at least $1,000 a year from renting their property.