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N.J. Rental-Tax Rollback Helps Homeowners But Irks Airbnb

Airbnb, Other Bookers Excluded in N.J. Rental-Tax Rollback Vote

(Bloomberg) -- New Jersey lawmakers agreed to roll back a tax on short-term rentals for homeowners who don’t advertise their properties on Airbnb Inc. and similar online services, creating a two-tiered system for vacation listings.

The state, whose Atlantic Ocean shoreline makes it a popular holiday destination, last year started charging a 6.6% sales tax and 5% hotel-occupancy tax on vacation rentals. But property owners complained that they weren’t running businesses, and said potential renters were threatening to go to other states where they didn’t have to pay extra fees.

The Democratic-controlled Senate and Assembly approved on Thursday an amendment to the occupancy tax bill to eliminate taxes on individually owned and non-professionally managed properties. It would remain in place for homes booked via Airbnb and other travel agencies through which rentals are offered, reserved and paid for.

Airbnb has 16,300 listings in New Jersey. The state’s occupancy tax law first took effect in October and within three months Airbnb had remitted more than $4 million in taxes for local and state services, a company spokeswoman said.

The home-share giant had opposed the amendment, urging lawmakers to treat all short-term rental providers equally. In written testimony, Josh Meltzer, an Airbnb public policy executive, said the change would create a loophole that would not only reduce the state’s tax revenue, but also “tilt the playing field against innovative platforms like Airbnb." It would cause confusion for consumers who would see varying prices for the same listing depending on whether it was offered on or off the platform, Meltzer wrote.

To become law, the amendment requires the signature of Governor Phil Murphy, who has not spoken about it publicly. Murphy’s first budget last year proposed the rental taxes.

To contact the reporters on this story: Elise Young in Trenton at eyoung30@bloomberg.net;Olivia Carville in New York at ocarville1@bloomberg.net

To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, Molly Schuetz, Alistair Barr

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