New Jersey Might Tax Airbnb Rentals, Allow Towns To Decide On Bans

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new jersey airbnb laws
New Jersey State House

If State Assembly members have their way, New Jersey might soon start collecting hotel taxes on short-term rentals across the state, but would also allow towns the authority to ban or restrict the rentals if they feel compelled to do so.

In a sign that the debate over Airbnb-style rentals isn’t going away any time soon, the Assembly’s Tourism, Gaming and Arts Committee approved two bills last week. The first would impose the same taxes on short-term rentals that are currently collected on hotels and motels and the other seeks to establish universal regulations for short-term rentals, something currently lacking at the state level.

Among other regulations, the second bill would require that hosts register with the state and be the legal owner or tenant of the space before putting it up for rent short-term. Those listing their properties on Airbnb or similar sites would have to secure liability insurance of at least $500,000, and hosts would only be able register units that have no outstanding code violations.

More significantly and potentially confusing, the bill would grant municipalities leeway to prohibit short-term rentals, allowing them the choice to ban property owners from renting their primary residences for a period of less than 30 days. There are carve-outs in the bill for seasonal summer rentals, which would not be subject to the new rules.

New Jersey’s Senate would need to introduce and pass a complimentary bill before any regulation changes take place, which would have to be signed into law by Governor Christie as a final step. Peter Schottenfels, a press secretary for Airbnb, says the company favors the tax collection legislation, and noted that they already have voluntary collection agreements in place with Newark and Jersey City.

Jersey Digs summarized some of the restrictions on Airbnb rentals last year, and quite a bit has changed since then. North Bergen banned short-term rentals back in January, and Palisades Park and Englewood Cliffs shut them down late last year. Fort Lee also banned Airbnb listings and many smaller towns have either enacted laws against short-term rentals or have discussed doing so, a practice that could continue even if the Assembly’s changes are enacted.

Those interested can read the full bill here, but it looks like regardless of what happens in Trenton with the latest legislation, the legality of your Airbnb listing will still depend on what town you live in.

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