By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County NJ Real Estate Law Firm
If you engage in any “transient rentals” (defined as rentals of 90 days or less), you must collect sales and occupancy taxes as of October 1, 2018. There are, however, some exclusions.
- If you rent your property through a licensed realtor, sales and occupancy taxes do not apply. For this exception from sales/occupancy taxes to apply, the renter must pick up the keys from the realtor, and no in-stay maid services can be provided.
- If you rent your property on an online marketplace which charges the renter directly (such as AirBnb), then the marketplace itself must collect the sales and occupancy tax from the renter. In that event, you are relieved from collecting sales and occupancy tax, since AirBnb will take care of it for you.
- If you rent your property on an online marketplace that does not charge the renter directly (such as Craigslist), you are required to collect sales/occupancy taxes. If you fall in this situation, the easiest way to avoid the requirement is to have the rental take place through a realtor as outlined in #1. While the realtor will charge a fee, failure to use a realtor will case sales and occupancy taxes to apply. Using a realtor will save you the hassle of registering for a sales tax permit and filing monthly sales tax reports online.
- If you rent your property directly with no realtor or online marketplace, then you are required to collect sales/occupancy taxes.
If you wish to read the full Technical Bulletin from the State, you can do so here: https://www.nj.gove/treasury/taxation/pdf/pubs/tb/tb81.pdf
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