NJ Airbnb tax: the New Jersey tax on short-term rentals, and the cases where nothing applies
Most New Jersey short-term rentals are taxed only when the booking comes through a platform.
Since August 9, 2019, Sales Tax and the State Occupancy Fee apply to a transient accommodation only if it is obtained through a transient space marketplace or the unit is professionally managed. A direct booking on an owner-managed house is generally outside the tax entirely.
- Sales Tax
- 6.625%
- State Occupancy Fee
- 5% in most of the state
- Municipal Occupancy Tax
- Up to 3%, where adopted
- Not taxed
- Direct bookings, brokers, leases of 90+ days
The lodging taxes that can apply to an Airbnb in New Jersey.
| Tax or fee | Rate | Notes |
|---|---|---|
| Sales Tax | 6.625% | Applies to the rental of taxable transient accommodations |
| State Occupancy Fee | 5% | Reduced to 1% in Elizabeth and Jersey City, and 3.15% in Wildwood, Wildwood Crest and North Wildwood |
| Municipal Occupancy Tax | Up to 3% | Any municipality other than Newark, Elizabeth, Jersey City, Atlantic City and the three Wildwoods may adopt it by ordinance |
| Meadowlands Regional Hotel Use Assessment | 3% | Rentals located in the Meadowlands area |
| County tourism taxes | Varies | Cape May County applies a tourism tax and a tourism assessment |
Each applicable tax must be stated separately on the bill or invoice given to the guest, with the Atlantic City Promotion Fee as the exception.
The August 2019 change decides most New Jersey tax obligations.
When the tax arrived on October 1, 2018 it reached every short-term rental. Owners renting Shore houses directly to the same families year after year were suddenly collecting tax, and the law was amended in response.
On and after August 9, 2019, a transient accommodation is subject to Sales Tax, the State Occupancy Fee and the Meadowlands assessment only if it is obtained through a transient space marketplace or is a professionally managed unit.
A transient space marketplace means a marketplace or travel agency through which someone may offer accommodations and customers may arrange occupancy. Obtained through one means payment is made by a means the marketplace provides, directly or indirectly, regardless of who receives it. Advertising on a platform and taking payment outside it is a different fact pattern from booking through it.
What counts as a professionally managed unit under the requirements in New Jersey.
This is the threshold that catches owners who thought the 2019 amendment protected them, and it is more specific than most summaries suggest.
A professionally managed unit is a unit offered for rent that shares no living or sleeping space with any other rental unit, and that is directly or indirectly owned or controlled by a person offering for rent two or more other units during the calendar year.
Read the count carefully. It is two or more other units, so the third unit is what changes your status. An owner with two houses can rent both directly without the tax applying. Adding a third brings all of them in.
The exclusions that take a Jersey Shore rental listing outside the tax.
Three of these matter to New Jersey owners, and the first two are the common ones.
- Direct bookings on an owner-managed unit. Not obtained through a marketplace and not professionally managed means not taxed. Classified ads, personal referrals and signage are the examples the Division gives.
- Broker-executed rentals. No maid, room or linen-changing service and no other common hotel services, the transaction executed by a broker licensed by the New Jersey Real Estate Commission, and the keys provided to the tenant at the broker's offsite location.
- Leases of at least 90 consecutive days. A seasonal lease long enough to cross that line is not a transient accommodation.
Hotels and motels are handled under their own rules rather than these, and dormitories, hospitals and campgrounds are excluded as well.
Who collects and remits, the host or the rental listing platform.
Where a marketplace processes the booking, the marketplace collects the tax from the guest and remits it to the Division of Taxation. That is why the line item appears on a guest's receipt without you doing anything.
Where the unit is professionally managed, the obligation is the owner's, even on a direct booking. You register, collect, state the taxes separately on the invoice and remit them yourself.
Mixed booking channels are where owners get caught. The platform bookings are handled and the direct bookings are not, and the direct ones are the owner's responsibility if the professionally managed test is met.
This is separate from income tax on the same rental.
Everything above is a transaction tax collected from your guest. It has nothing to do with the tax you pay on the profit.
Income tax brings in an entirely different set of questions: whether the average stay puts the property outside the passive rental rules, whether you materially participate, what depreciation you can accelerate, and what New Jersey allows on the state return. Those are covered on the short-term rental tax rules.
What people ask next.
- Why is Airbnb charging around 15% on my New Jersey listing?
- The statewide base is 11.625 percent: 6.625 percent Sales Tax plus a 5 percent State Occupancy Fee. A municipality other than Newark, Elizabeth, Jersey City, Atlantic City and the three Wildwoods can adopt a Municipal Occupancy Tax of up to 3 percent on top, which brings the total to about 14.6 percent. Some towns add tourism taxes instead, and a few of the named cities use different rates.
- Do I still register with the State if Airbnb collects the tax?
- Marketplaces that collect are responsible for remitting on the bookings they process. If you also take bookings any other way, or you fall into the professionally managed unit definition, the obligation is yours and you need to be registered. Owners often assume the platform covers everything and then find a direct booking created a filing requirement.
- What if I rent through a real estate broker?
- That can put the rental outside the tax entirely. The exclusion requires furnished or unfurnished private residential property with no maid service, room service, linen-changing or other common hotel services, a transaction executed by a broker licensed by the New Jersey Real Estate Commission, and keys handed to the tenant at the broker's offsite location. This is the traditional Jersey Shore seasonal rental.
- Does a three-month lease count as a transient accommodation?
- No. A lease of real property with a term of at least 90 consecutive days is not a transient accommodation, so none of these taxes apply to it.
- Is this the same as the income tax on my rental?
- No, and they are easy to confuse. These are transaction taxes collected from your guest on each booking. Income tax on the profit is a separate matter, filed on your NJ-1040 and your federal return, with its own rules about depreciation and whether losses can offset other income.
Where people go from here.
The seven-day test, material participation, and whether the loss can reduce your salary.
Every rule where New Jersey departs from the federal treatment, in one place.
Per-property books that keep collected tax, income and expenses straight.
- NJ Division of Taxation, TB-81R2, Transient Accommodations
- NJ Division of Taxation, transient accommodations FAQ
- NJ Division of Taxation, registering and collecting taxes and fees on occupancies
This page explains how the rules generally work. It is not tax advice for your situation. Rates and thresholds change. Ask Simon before you sign anything.
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