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Taxes Imposed on the Rental of Transient Accommodations
TB-81R2 - Issued December 9, 2019
Tax: Sales Tax and Other Applicable Taxes
Transient Accommodations
As of October 1, 2018, the law imposes Sales Tax, the State Occupancy Fee, and the
Meadowlands Regional Hotel Use Assessment on transient accommodations. On and
after August 9, 2019, the law was amended to subject a transient accommodation to Sales
Tax, the State Occupancy Fee, and the Meadowlands Regional Hotel Use Assessment
ONLY if it is obtained through a transient space marketplace or is a professionally
managed unit.
The law also authorizes certain municipalities to amend or adopt an ordinance to impose
the following taxes on transient accommodations: the Municipal Occupancy Tax, Sports
and Entertainment Facility Tax - Millville, Atlantic City Luxury Tax, the Atlantic City
Promotion Fee, Cape May County Tourism Tax and Assessment, and the hotel occupancy
tax - Elizabeth, Newark, and Jersey City (contact the municipality directly for information
on the hotel occupancy tax).
Definitions
“Transient accommodation” means 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 that is obtained through a transient space marketplace or is a
professionally managed unit (defined below).
The following are not considered transient accommodations:
• Hotel or hotel room (although hotels, motels, and similar facilities are not
considered transient accommodations, such facilities are required to collect Sales
Tax and other applicable taxes, fees, assessments on the rental of a room);
• Room, group of rooms, or other living or sleeping space used as a place of
assembly;
• Dormitory or other similar residential facility of an elementary or secondary
school or a college or university;
• Hospital, nursing home, or other similar residential facility of a provider of services
for the care, support, and treatment of individuals that is licensed by the State;
• Leases of real property with a term of at least 90 consecutive days;
• Campsite, cabin, lean-to, or other similar residential facility of a campground or
an adult or youth camp; or
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• Furnished or unfurnished private residential property, including but not limited
to condominiums, bungalows, single-family homes, and similar living units, where
no maid service, room service, linen-changing service, or other common hotel
services are made available by the lessor, and the rental transaction is executed by
a real estate broker licensed by the New Jersey Real Estate Commission pursuant
to N.J.S.A. 45:15-1 et seq., and where the keys to the property, whether a physical
key, access to a keyless locking mechanism, or other means of physical entrance to
the property, are provided to the lessee at the offsite location of the licensed real
estate broker.
A “professionally managed unit” means a room, group of rooms, or other living or
sleeping space for the lodging of occupants in the State, that is offered for rent as a rental
unit that does not share any 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.
Real Estate Broker Exclusion
A transient accommodations does not include furnished or unfurnished private residential
property, including but not limited to condominiums, bungalows, single-family homes,
and similar living units, where no maid service, room service, linen-changing service, or
other common hotel services are made available by the lessor, and the rental transaction
is executed by a real estate broker licensed by the New Jersey Real Estate Commission
pursuant to N.J.S.A. 45:15-1 et seq., and where the keys to the property, whether a physical
key, access to a keyless locking mechanism, or other means of physical entrance to the
property, are provided to the lessee at the offsite location of the licensed real estate
broker.
“Executed by a real estate broker” means that the real estate broker performs all the
services necessary to carry out the rental. For example, a real estate broker advertises the
rental listing, solicits renters, assists in referrals, negotiates and executes rental
agreements, collects rent, etc. See N.J.S.A. 45:15-3. The rental is excluded from the
definition of “transient accommodation” and is not subject to Sales Tax, the State
Occupancy Fee, or any other occupancy tax, assessment, or fee when the following four
criteria are satisfied:
• The rental is executed by a real estate broker licensed by the New Jersey Real Estate
Commission; and
• The keys or other means of physical entrance to the property are provided to the
renter at the location of the offsite real estate broker; and
• The rental property is private residential property; and
• No common hotel services such as maid service, room service, or linen-changing
service are provided.
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Note that a transient space marketplace is required to collect Sales Tax, the State
Occupancy Fee, and other applicable tax, assessment, or fee if a real estate broker lists a
rental on a marketplace and the rental is obtained through the transient space
marketplace. The real estate broker exclusion does not apply because the rental was not
executed by the real estate broker.
Example: Property Owner charges Renter for the rental of his house. Property Owner
does not provide common hotel services such as maid service, room service, or linen-
changing service. Property Owner lists the rental through a licensed real estate broker.
The real estate broker advertises the rental, negotiates and executes the rental agreement,
and collects the rental payment from the Renter. The Renter appears in-person at the real
estate broker’s office to obtain the key to the property. This rental is not subject to Sales
Tax, the State Occupancy Fee, or other applicable tax, assessment, or fee because the real
estate broker executed the rental transaction.
Professionally Managed Unit
A “professionally managed unit” means a room, group of rooms, or other living or
sleeping space for the lodging of occupants in the State, that is offered for rent as a rental
unit that does not share any 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.
The definition of professionally managed unit is broadly written, and it does not contain
any language concerning the type of rental. The definition merely refers to a unit that is
“offered for rent as a rental unit,” so the units only have to be held out for rental. Each
rental of the professionally managed unit is looked at separately when determining its
taxability. Since there is no requirement that only units that are rented for less than 90
days are to be included in counting the number of units available for rental, all rentals are
included when considering whether the owner offers three or more units for rent in New
Jersey. But the rentals that occur for at least 90 consecutive days are not taxed under the
law.
Example 1: Property Owner owns three houses which she holds out for rent via an
advertisement placed in a newspaper. The rentals are a professionally managed unit since
Property Owner owns and rents three or more houses for rent in New Jersey. Property
Owner is required to collect and remit Sales Tax, the State Occupancy Fee, and other
applicable tax, assessment, or fee.
Example 2: Property Owner owns two houses which he directly rents out to renters via
an advertisement placed in a newspaper. The rentals are not subject to Sales Tax, the State
Occupancy Fee, and other applicable tax, assessment, or fee because it is not a
professionally managed unit nor was the rental obtained through a transient space
marketplace.
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Example 3: Property Owner owns three units in New Jersey where two are apartments
rented on a weekly basis and the third is a house rented on a yearly basis. This is a
professionally managed unit since Property Owner offers three units for rent in New
Jersey. Property Owner must collect and remit Sales Tax, the State Occupancy Fee, and
other applicable tax, assessment, or fee on rentals of the two apartments. However, the
rental of the house is not subject to Sales Tax, the State Occupancy Fee, and other
applicable taxes, assessments, and fees since it is rented for more than 90 consecutive
days.
Transient Space Marketplaces
“Transient accommodation” means 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 that 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 a person may offer transient accommodations to customers
and through which customers may arrange for occupancies of transient accommodations.
The definition of a transient space marketplace does not include a marketplace or travel
agency that exclusively offers transient accommodations in New Jersey owned by the
owner of the marketplace or travel agency. “Obtained through a transient space
marketplace” means that payment for the accommodation is made through a means
provided by the marketplace or travel agency, either directly or indirectly, regardless of
which person or entity receives the payment, and where the contracting for the
accommodation is made through the marketplace or travel agency.
Example 1: Property Owner posts an advertisement to rent out her home on a transient
space marketplace (Marketplace A). Marketplace A does not charge Property Owner to
post the advertisement. Renter rents the home for a week on Marketplace A and
Marketplace A collects Renter’s payment via credit card. Marketplace A deducts its
commission and provides the remaining payment balance to Property Owner. Since this
transaction is obtained through the transient space marketplace, Marketplace A is
required to collect Sales Tax, the State Occupancy Fee, and other applicable tax,
assessment, or fee from Renter and remit the taxes to the Division of Taxation (Division).
Example 2: Property Owner then decides to also post an advertisement to rent out her
home on a different marketplace (Marketplace B). Marketplace B charges Property Owner
a fixed amount to post the advertisement. The advertisement contains Property Owner’s
contact information. In order to rent the home, Renter must contact and pay Property
Owner directly. Since this transaction was not obtained through a transient space
marketplace, Marketplace B is not required to collect and remit applicable taxes from
Renter. Property Owner is required to register with the Division of Revenue and Enterprise
Services (DORES) and must collect Sales Tax, the State Occupancy Fee, and other
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applicable tax, assessment, or fee from Renter and remit them to the Division for all rentals
that result from posting an advertisement on Marketplace B if the transient
accommodation is a professionally managed unit.
Registration
Every person who rents a transient accommodation which is a professionally managed
unit is a seller and must register with the State for the collection and remittance of all
applicable taxes, fees, or assessments by filing a business registration application (Form
NJ-REG). The law requires registration at least 15 business days prior to commencing
business. Every person who rents a transient accommodation which is a professionally
managed unit must register unless 1) all rentals are obtained through a transient space
marketplace; or 2) are executed by a real estate broker licensed by the New Jersey Real
Estate Commission, the keys or other means of physical entrance to the property are
provided to the lessee at the location of the offsite real estate broker, the rental property
is private residential property, and the lessor does not provide common hotel services
such as maid service, room service, or linen-changing service.
To register with New Jersey, visit the DORES website. Once registered, you will receive a
letter containing additional filing and payment information.
Registered sellers already engaged in the business of renting or leasing transient
accommodations need to update their tax registration to include Sales Tax, the State
Occupancy Fee, the Meadowlands Regional Hotel Use Assessment (if applicable), and any
other applicable taxes, fees, or assessments.
Businesses not engaged in the business of renting or leasing transient accommodations
should complete a new and separate registration.
How to Unregister
On and after August 9, 2019, an owner who is no longer required to be registered may
end their registration online. Choose “File Online Now,” enter the ID# and PIN, and
then “End the Business.” If you need assistance or do not know your PIN, please contact
DORES, Customer Service Center at 609-292-9292. Note that you must file your final
return prior to ending your business.
Billing
Sales Tax, the State Occupancy Fee, the Meadowlands Regional Hotel Use Assessment (if
applicable), and any other applicable tax, fee, or assessment, other than the Atlantic City
Promotion Fee, must be separately stated on any bill, invoice, or other document provided
to the renter. All taxes, fees, or assessments, other than the Atlantic City Promotion Fee,
are collected by the owner on behalf of the State and the owner is personally liable if the
taxes, fees, or assessments, are not remitted to the Division.
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Transitional Rule - On and After October 1, 2018 to August 8, 2019
Sales Tax, the State Occupancy Fee, and the Meadowlands Regional Hotel Use
Assessment, if applicable, are to be charged on the rental of any transient accommodation
(including all direct rentals by the owner and all rentals that were not solely consummated
through a transient space marketplace) occurring on and after October 1, 2018, until
August 8, 2019, regardless of any prior lease, contract, or other rental agreement. If a
rental starts prior to October 1, 2018, and ends after October 1, 2018, but before August
8, 2019, the applicable taxes, fees, and assessments must be charged based on the
number of days falling in the taxable period.
Example: Renter rents a vacation home from September 28, 2018, to October 4, 2018, for
$2,100. Since part of the rental takes place after October 1, 2018, Sales Tax and the State
Occupancy Fee must be collected based on the number of days falling in the taxable
period ($2,100/7 = $300 x 4 days = $1,200)*. The invoice, bill, or other receipt issued to
Renter states:
Weekly Rental $2,100
Sales Tax ($1,200* x 6.625%) $79.50
State Occupancy Fee ($1,200* x 5%) $60
Total $2,239.50
The same concept applies in Atlantic City, Millville, Wildwood, Wildwood Crest, North
Wildwood, or any other municipality which amends or adopts an ordinance that imposes
the Municipal Occupancy Tax, Sports and Entertainment Facility Tax - Millville, Atlantic
City Luxury Tax, the Atlantic City Promotion Fee, or the Cape May County Tourism Tax and
Assessment on the rental of transient accommodations (see below for information
regarding each of these municipal taxes, assessments, and fees).
Transitional Rule - On and After August 9, 2019, for Rentals that are not Obtained
Through a Transient Space Marketplace or is not a Professionally Managed Unit
On and after August 9, 2019, taxes, assessments, and fees are not due if the rental is not
obtained through a transient space marketplace or if it is not a professionally managed
unit. If such a rental starts prior to August 9, 2019, and ends on or after August 9, 2019,
the applicable taxes, assessments, and fees must be charged based on the number of days
falling in the taxable period.
State and Local Taxes, Fees, and Assessments that may Apply to the Rental of
Transient Accommodations
All rentals of transient accommodations obtained through a transient space marketplace
or that is a professionally managed unit are subject to Sales Tax and the State Occupancy
Fee. Additional taxes, fees, or assessments may also apply, depending on the location of
the transient accommodation.
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Sales Tax
The law imposes Sales Tax on the rental of transient accommodations at the rate of
6.625%.
The rental of transient accommodations are not subject to Sales Tax if:
• The rental occurs on or after August 9, 2019, is obtained directly through the owner
(such as through classified ads, personal referrals, signage, etc.), and is not a
professionally managed unit;
• The rental is executed by a real estate broker licensed by the New Jersey Real Estate
Commission, the keys or other means of physical entrance to the property are
provided to the lessee at the location of the offsite real estate broker, the rental
property is private residential property, and the lessor does not provide common
hotel services such as maid service, room service, or linen-changing service;
• The rental occurs for at least 90 consecutive days (permanent resident exemption);
• The renter is an entity that has been granted exempt status by the Division and has
been issued an Exempt Organization Certificate (Form ST-5); or
• The renter is the federal government or the State of New Jersey or any of their
agencies or instrumentalities.
State Occupancy Fee
The law imposes the State Occupancy Fee at the rate of 5% on the rental of transient
accommodations that are subject to Sales Tax.
If Atlantic City, Newark, Jersey City, Wildwood, Wildwood Crest, or North Wildwood
amend their municipal ordinance to impose a local tax on the rental of transient
accommodations, the State Occupancy Fee will be imposed on such rentals at a lower rate
(Atlantic City - 1%: Newark, Jersey City, Elizabeth - 1%: and Wildwood, Wildwood Crest,
and North Wildwoods - 3.15%).
Effective October 2, 2018, Elizabeth amended their ordinance to impose their hotel
occupancy tax on transient accommodations. Therefore, a rental of a transient
accommodation obtained through a transient space marketplace or that is a
professionally managed unit (and a hotel occupancy) occurring in Elizabeth is subject to
a total of 13.625% in taxes and fees (6.625% Sales Tax, 6% Elizabeth occupancy tax, and
1% State Occupancy Fee).
Other than Elizabeth, no other municipality has imposed a local tax on the rental of
transient accommodations, therefore, the State Occupancy Fee is currently imposed on
rentals of transient accommodations at a rate of 5%. Additional information will be
provided if Atlantic City, Newark, Jersey City, Wildwood, Wildwood Crest, or North
Wildwood amend their ordinance to impose a local tax on transient accommodations.
Note: The State Occupancy Fee on hotel occupancies remains at the lower rates indicated
above.
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Meadowlands Regional Hotel Use Assessment
The rental of transient accommodations located in the Meadowlands area are subject to
the 3% Meadowlands Regional Hotel Use Assessment. The municipalities are:
• Bergen County – Carlstadt, East Rutherford, Little Ferry, Lyndhurst, Moonachie,
North Arlington, Ridgefield, Rutherford, South Hackensack, Teterboro; and
• Hudson County – Jersey City, Kearny, North Bergen, Secaucus.
The rental of transient accommodations are not subject to the Meadowlands Regional
Hotel Use Assessment if:
• The rental occurs on or after August 9, 2019, is obtained directly through the owner
(such as through classified ads, personal referrals, signage, etc.), and is not a
professionally managed unit;
• The rental is executed by a real estate broker licensed by the New Jersey Real Estate
Commission, the keys or other means of physical entrance to the property are
provided to the lessee at the location of the offsite real estate broker, the rental
property is private residential property, and the lessor does not provide common
hotel services such as maid service, room service, or linen-changing service;
• The rental occurs for at least 90 consecutive days (permanent resident exemption);
• The renter is an entity that has been granted exempt status by the Division and has
been issued an Exempt Organization Certificate (Form ST-5); or
• The renter is the federal government or the State of New Jersey or any of their
agencies or instrumentalities.
Municipal Occupancy Tax
The law authorizes any New Jersey municipality, other than Newark, Elizabeth, Jersey City,
Atlantic City, Wildwood, Wildwood Crest, and North Wildwood, to amend or adopt an
ordinance that imposes the Municipal Occupancy Tax on charges for the rental of
transient accommodations in that municipality, which can be up to 3%. Before the tax can
be effective, the ordinance must be sent to the Division of Taxation and at least 90 days
must pass. The Division has not received any new or amended ordinances. Therefore,
transient accommodations are not subject to the Municipal Occupancy Tax. This tax is
currently only imposed on hotel occupancies. Additional information will be provided if a
municipality amends their ordinance to impose the Municipal Occupancy Tax on transient
accommodations.
Atlantic City Promotion Fee
The law authorizes Atlantic City to adopt or amend an ordinance that imposes a one dollar
per day Atlantic City Promotion Fee on the rental of transient accommodations in Atlantic
City. Atlantic City has not amended their ordinance to impose the Atlantic City Promotion
Fee on transient accommodations. Therefore, transient accommodations occurring in
Atlantic City are not subject to the Atlantic City Promotion Fee. Additional information will
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be provided if Atlantic City amends their ordinance to impose the Atlantic City Promotion
Fee on transient accommodations.
Atlantic City Luxury Tax
The law also authorizes Atlantic City to adopt or amend an ordinance that imposes the
9% Atlantic City Luxury Tax on the rental of transient accommodations which occur for
less than one year in Atlantic City. Atlantic City has not amended their ordinance to
impose the Atlantic City Luxury Tax on transient accommodations. Therefore, transient
accommodations occurring in Atlantic City are not subject to the Atlantic City Luxury Tax.
Additional information will be provided if Atlantic City amends their ordinance to impose
the Atlantic City Luxury Tax on transient accommodations.
Sports and Entertainment Facility Tax – Millville
The law authorizes Millville to adopt or amend an ordinance that imposes the 2% Sports
and Entertainment Facility Tax on the rental of transient accommodations which occur in
Millville. Millville is currently the only municipality that imposes the Sports and
Entertainment Facility Tax. Millville has not amended their ordinance to impose the Sports
and Entertainment Facility Tax on transient accommodations. Therefore, transient
accommodations occurring in Millville are not subject to the Sports and Entertainment
Facility Tax. This Tax is currently only imposed on hotel occupancies. Additional
information will be provided if Millville amends their ordinance to impose the Sports and
Entertainment Facility Tax on transient accommodations.
Cape May County Tourism Tax and Assessment
The law authorizes Wildwood, Wildwood Crest, and North Wildwood to adopt or amend
an ordinance that imposes the 2% Cape May County Tourism Tax and the 1.85% Cape
May County Tourism Assessment on the rental of transient accommodations which occur
in Wildwood, Wildwood Crest, and North Wildwood. Wildwood, Wildwood Crest, and
North Wildwood have not amended their ordinances to impose the Cape May County
Tourism Tax or the Cape May County Tourism Assessment on transient accommodations.
Therefore, transient accommodations occurring in these municipalities are not subject to
the Cape May County Tourism Tax or the Cape May County Tourism Assessment. The
Cape May County Tourism Tax and the Cape May County Tourism Assessment are
currently only imposed on hotel occupancies. Additional information will be provided if
Wildwood, Wildwood Crest, or North Wildwood amend their ordinance to impose the
Cape May County Tourism Tax or the Cape May County Tourism Assessment on transient
accommodations.
Tax Collection Responsibility of Transient Space Marketplace
A transient space marketplace is required to collect and remit Sales Tax, the State
Occupancy Fee, the Meadowlands Regional Hotel Use Assessment (if applicable), and any
applicable State and local occupancy tax, assessment, or fee listed above, but only when
such rentals are obtained through the transient space marketplace.
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In order for the rental to be “obtained through the transient space marketplace,” the
payment for the accommodation must be made through a means provided by the
marketplace or travel agency, either directly or indirectly, regardless of which person or
entity receives the payment, and where the contracting for the accommodation is made
through the marketplace or travel agency.
Example 1: Property Owner posts an advertisement to rent out his home on a transient
space marketplace (Marketplace). Marketplace does not charge Property Owner to post
the Advertisement. Renter rents the home for a week on Marketplace and Marketplace collects
Renter’s payment via credit card. Marketplace deducts its commission and provides the remaining
balance to Property Owner. Since this rental is obtained through the transient space marketplace,
Marketplace is required to collect Sales Tax, the State Occupancy Fee, and other applicable tax,
assessment, or fee from Renter and remit them to the Division.
Example 2: Property Owner posts an advertisement to rent out her home on a transient
space marketplace (Marketplace 2). Marketplace 2 charges Property Owner a fixed
amount to post the advertisement. The advertisement contains Property Owner’s contact
information. In order to rent the home, Renter must contact and pay Property Owner
directly. Since this transaction was not obtained through a transient space marketplace,
Marketplace 2 is not required to collect and remit Sales Tax, the State Occupancy Fee,
and other applicable tax, assessment, or fee. Note that if the transient accommodation is
a professionally managed unit, Property Owner is required to collect Sales Tax, the State
Occupancy Fee, and other applicable tax, assessment, or fee from Renter and remit them
to the Division.
Required Document Retention
Transient space marketplaces are required to keep the following information for four
years after the transaction occurs:
• The name of the person who provided the transient accommodation;
• The name of the customer who purchased the transient accommodation;
• The address, including any unit designation, of the transient accommodation;
• The dates and nightly rates for which the renter purchased the transient
accommodation;
• The municipal transient accommodation registration number, if applicable;
• A statement as to whether such booking services will be provided in connection
with (i) short-term rental of the entirety of such unit, (ii) short-term rental of part
of such unit, but not the entirety of such unit, and/or (iii) short-term rental of the
entirety of such unit, or part thereof, in which a non-short-term occupant will
continue to occupy such unit for the duration of such short-term rental;
• The individualized name or number of each such advertisement or listing
connected to such unit and the uniform resource locator (URL) for each such listing
or advertisement, where applicable; and
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• Such other information as the Division may require.
The Division may audit transient space marketplaces to ensure data accuracy and enforce
tax compliance.
Note: A Technical Bulletin is an informational document that provides guidance on a topic
of interest to taxpayers and may describe recent changes to the relevant laws, regulations,
and/or Division policies. It is accurate as of the date issued. However, taxpayers should be
aware that subsequent changes to the applicable laws, regulations, and/or the Division’s
interpretation thereof may affect the accuracy of a Technical Bulletin. The information
provided in this document does not cover every situation and is not intended to replace
the law or change its meaning.
