ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

ASSEMBLY COMMITTEE SUBSTITUTE FOR

ASSEMBLY, Nos. 4814 and 4520

STATE OF NEW JERSEY

DATED:  MAY 20, 2019

      The Assembly Appropriations Committee reports favorably an Assembly Committee Substitute for Assembly Bill Nos. 4814 and 4520.

      This committee substitute amends the definition of “transient accommodation” and “transient space marketplace” as they relate to the transient accommodation rental taxes imposed by P.L.2018, c.49.

      Pursuant to this bill, a transient accommodation rental will only be subject to taxes if the rental is obtained through a marketplace. A marketplace, online or otherwise, allows accommodations to be listed and provides a means for arranging the rental of the accommodation.

      The marketplaces are required to collect and remit the taxes on rentals on behalf of accommodation owners. No one else is required to collect and remit the taxes, as accommodations not obtained through a marketplace are not subject to taxes under the bill.  

FISCAL IMPACT:

      The Office of Legislative Services (OLS) expects the bill to result in an indeterminate annual decrease in State revenues because the bill exempts rent charged for the occupancy of a room in a transient accommodation from State sales and use taxes and hotel and motel fees, provided the rental transaction is not executed through a marketplace. The OLS cannot quantify the overall impact of the bill on State and local revenues due to an absence of necessary data and the changing landscape of the transient accommodations market.

      Local governments that impose applicable hotel taxes and fees authorized under current law and adopt an ordinance extending the local taxes and fees to transient accommodations, would potentially collect a lower amount of additional revenues under this bill because the taxes and fees would apply to a smaller group of taxable rentals than permitted under current law.