P.L. 2018, c. 49, signed by Governor Murphy on July 1, authorizes municipalities to impose, where applicable, the Hotel Occupancy Tax; Municipal Occupancy Tax; Atlantic City Luxury Tax; Atlantic City Promotion Fee; Cape May County Tourism Sales Tax; Cape May County Tourism Assessment; Sports and Entertainment Facility Tax; and/or Meadowlands Regional Hotel Use Assessment on transient accommodations.
A Transient accommodation is a room, group of rooms, or other living or sleeping space for the lodging of occupants, including but not limited to residences or buildings used as residences. It does not include hotel rooms, rooms used as places of assembly, dormitories, hospitals, nursing homes, campsites or single family homes, condominiums or bungalows with no maid service, room service or linen changing services and the keys are provided at an offsite licensed real estate office.
The new law requires transient space marketplaces, which are specifically defined in the law, to collect and pay the tax on behalf of the property owner. The transient space marketplaces are required to maintain the following data for at least four years:
•The name of the person who provided the transient accommodation;
•The name of the customer who procured occupancy of the accommodation;
•The address, including any unit designation, of the accommodation;
•The dates and nightly rates;
•The municipal transient accommodation registration number, if applicable;
•Whether the short term rental was for the entire unit or part of the unit;
•Individual name or number of each advertisement or listing connected to the unit with URL; and
•Any other information required by the Division of Taxation.
In the era of sharing economies, transient accommodations are becoming more common-place. This is not a new tax but a logical extension of a current tax to transient accommodations which were not subject to the same various occupancy taxes as hotels and motels. It provides parity within the industry and fairness for taxpayers.
The Division of Taxation, in consultation with the Division of Local Government Services, has begun the process to implement the new law, which will take effect on October 1, 2018. Additional information will be available on the Division of Taxation’s website.
If your municipality has enacted any of the applicable occupancy taxes, we suggest that you review your current ordinance with your municipal attorney and consider amending it to include the receipts from transient accommodations. If you have no hotel/motels in your community, but do have rentals of transient accommodations, you may want to consider adopting an ordinance to permit the collection of the tax. Most local occupancy taxes only become effective on the first day of the first full month 90 days after transmittal to the State Treasurer.
Contact: Lori Buckelew, Senior Legislative Analyst, firstname.lastname@example.org, 609-695-3481, ext. 112.