Memo – NJ Short Term Rental Owner? Using Airbnb, VRBO, HomeAway or TripAdvisor? Read On

These companies, that are accepting payment of the rents on your short-term rentals, are required by law to collect any and all state sales taxes and occupancy fees that may be due on those rentals and remit them to NJ on your behalf.

Remember, those sales taxes and occupancy taxes come from the tenants and they are YOUR responsibility.

Unfortunately, I have been seeing in my research that some of these companies are not following the law and are not collecting sales tax or fees at all, or collecting the correct amount.

This puts the landlord, YOU, not these companies, at risk. Remember you, as the landlord, are ultimately responsible for the sales and occupancy taxes due on your properties. These TSM, Airbnb, VRBO, HomeAway or TripAdvisor, are simply acting as your agent to collect and remit the taxes.

My advice is to fully audit any transactions that you have consummated with any of these services to make sure that they have done their proper job and collected and remitted every dollar of tax they were supposed to.

Make sure any TSM provides you, in writing, their clear policy that reflects they have the systems and processes in place to fully comply with the law on your behalf. Be sure, again in writing, that the TSM takes full financial responsibility for any shortfall in taxes and fees they failed to collect and remit. Also, they need to assure you that any related interest and penalties assessed from NJ on any shortfalls will be borne by them and NOT YOU.

Don’t forget the entire state does not have uniform occupancy fees. You need to find out if there are any special rules in the town / county where you own your rental property.

You can be sure that the NJ Division of Taxation will be auditing the short term rentals to make examples of everyone involved.

Owners, realtors, brokers, TSM, everyone.

I cannot stress enough that the owner is ultimately responsible for the taxes and fees, regardless of how many intermediaries are used in their short term rental transactions.

Click here to read my detailed memo on Short Term Rentals and Sale Tax in NJ.

Questions? Concerns? Call me on (732) 673-0510.