Effective October 1, 2018, New Jersey sales and use tax will be imposed on “transient accommodations”.  Transient accommodations include a room, a group of rooms, or other living /sleeping space for the lodging of occupants, which can include residential buildings. The following situations do not constitute a transient accommodation:

•  Places of assembly
•  Health care facilities
•  School dormitories
•  Campgrounds
•  Leases of real property with a term of at least 90 consecutive days.

The new law essentially targets short-term housing rental, with a term of less than 90 days. Effective October 1, 2018, persons engaged in the business of providing transient accommodations in New Jersey through a marketplace facilitator, must charge sales tax on the rental income and ancillary charges. The most commonly known transient space marketplace facilitator is Airbnb. Rental of shore homes, during the summer months or ski chalets during the winter months, through a conventional realtor or other rental agency, would also be considered a marketplace facilitator.

A transient space marketplace does not include a marketplace operated by a hotel that facilitates hotel occupancy solely for the hotel’s chain.

New Jersey sales and use tax law is an ever-changing landscape that can be very confusing. Please contact us for expert professional advice to keep up with these new changes.

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