New Jersey is one of the first big states to adopt a surcharge on short-term rentals — a so-called Airbnb tax. It kicked in Oct. 1 and is causing vacationers to rethink their summer travels and stirring anxiety among the homeowners who rely on them.
The fallout over the 11.6 percent tax has inserted New Jersey into a broader debate as states and communities grapple with the explosive growth of the online home-sharing economy. A patchwork framework of local ordinances has failed to keep pace with the rapid rise of Airbnb, the largest home-sharing site.
Massachusetts also recently passed a statewide tax on short-term rentals aimed at Airbnb and other home-sharing sites. A proposal to increase the sales tax on similar rentals has been introduced in Colorado.
In New York City, Airbnb and local officials have been at war over efforts to crack down on the industry. A federal judge blocked a law in January that would have required Airbnb to provide detailed information about listings and hosts, and the city recently filed a lawsuit against a group of real estate brokers, accusing them of using Airbnb to illegally rent out dozens of apartments.
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State and local governments that have moved to rein in Airbnb and other home-sharing sites have set off alarm bells among those whose economic survival is tied to the short-term rental market and who are angry that they are being ensnared by new taxes and regulations.
Vacationers are abandoning long-held traditions and heading elsewhere. Homeowners complain they are having a hard time filling properties when they should be well on their way to being fully booked for summer. And businesses that rely on free-spending summer visitors fear that the rental tax threatens their most important time of year.
“People are actually canceling and forgoing deposits to get away from the taxes,” said George Triebenbacher, who rents out seven properties on Long Beach Island in New Jersey.
The 11.6 percent tax applies to all rentals fewer than 90 days, including those made on home-sharing sites or directly between a renter and an owner. The only exceptions are rentals arranged through a Realtor, which are not subject to the tax.
This article originally appeared in The New York Times.