Taxes Imposed on Charges for the Rental of Transient Accommodations

Unfortunately, the NJ Division of Taxation has come out with their detailed explanation of the updated Bill A4496, and basically they just closed the realtor loophole stating that realtors have to handle the whole transaction in order for the renter to be exempt from the new taxes. Realtors (as I stated weeks ago) cannot be used as strictly a key service. 

They also clarified that ALL owners (no matter where they advertise or don't advertise) are responsible to collect and submit sales, occupancy and local tax from the renters if the renter does not book directly with a Realtor. 

View 
TB-81R which details "TAXES IMPOSED ON CHARGES FOR THE RENTAL OF TRANSIENT ACCOMMODATIONS".

I have explained your choices below in the green boxes.

ADVERTISING WITH SHORE SUMMER RENTALS (BEST SOLUTION FOR OWNERS)
(CLICK HERE TO SEE HOW SSR OWNERS SAVE THOUSANDS AND RENTERS SAVE HUNDREDS PER RENTAL)

1. No booking fees to renter. Renters are becoming aware with BOOKING DIRECT!
2. No service fees to owner.
3. No commissions to owner.
4. Low yearly fee to join.
5. You will need to charge renter sales and occupancy tax. We have partnered with a firm who will take care of submitting and filing for you for a one time $50 set up fee and then only $20 per month.
Click here to get set up now! This is not a requirement to advertise on ShoreSummerRentals.com, just a recommendation.
6. Some towns have a local tax as well. Click here to see if your town has this tax. 
7. Direct contact with your renters.
8. We do not handle YOUR money.
9. We do not penalize you EVER!
10. Amazing traffic to your listing.
11. Local, accessible business that is accountable for your success.


Again, we have partnered with a firm who will take care of submitting and filing for you for a one time $50 set up fee and then only $20 per month. Click here to get set up now! This is not a requirement to advertise on ShoreSummerRentals.com, just a recommendation.


ADVERTISING WITH HOMEAWAY/VRBO TYPES
(CLICK HERE TO VIEW RENTER/OWNER COST COMPARISON)
1. Renters will pay between 6% and 12% in service fees and sometimes an administrative fee.
Click here to view their RENTER service fees directly from their website.
2. Owner will pay 5% commission per rental on the pay per booking model.
3. Owner will pay and additional 3% in credit card fees.

Click here to view their OWNER PPB fees directly from their website.
4. Homeaway will collect and submit State Sales Tax (6.625%) as well as a State Occupancy Fee (5%) from the renters. They are required to collect and remit for you.  Not sure if they will charge you for this.
5. Homeaway will also charge renters a 10% service fee on top of the taxes for their cut.
6. Owner will not speak directly to renters upfront, the owner has no control.
7. Owner gets penalized over every little thing, they control you!
8. VRBO will provide you a 1099-MISC form to report your income to the IRS.
9. Renters & owners will pay the most with VRBO, big corporate greed at its worst!

Article on Homeaway/VRBO sneakily hiking their fees.


THE OWNER WANTS TO DEAL WITH REALTORS SO RENTERS DO NOT HAVE TO PAY THE TAXES. RENTERS WILL PAY OTHER FEES. 

1. Owners should keep their SSR listing active so they can forward their leads to a realtor. Realtors may not be able to book all of your weeks. SSR will provide much more traffic to your ad. 

2. If your home is in an area that Keller Williams Jersey Shore covers, you can list your rental with with me as your listing agent. You will agree to have Keller Williams manage the bookings. The owner will pay Keller Williams a 10% commission if they list exclusively with Keller Williams Jersey Shore or 12% for a non-exclusive contract. 


Keller Williams Jersey Shore Rental Department covers:
a. The Wildwoods
b. Ocean City
c. Avalon

3. The renter will not pay any NJ State sales taxes or related Occupancy Taxes but Keller Williams will control the entire transaction. Since they advertise on various platforms, they are not able to screen tenants.

4. The renters will need to PHYSICALLY go to real estate office to pick up the key or codes to enter the rental home to be exempt from these taxes. Emailing of codes or leaving a key at the home will void the tax exemption.

5. The renter WILL pay an additional 4.5% of the rental rate as a transaction fee plus a $50 damage insurance fee with Keller Williams Jersey Shore. Check with your Realtor for their fees.


 6. If your home is outside of the Keller Williams Jersey Shore coverage area, you can list with any Realtor in your town and forward your SSR leads to them.

7. On a $2,500.00 rental, the owner will pay $300.00 and the renter will pay $162.60 totaling $462.00 in fees between the owner and renter. For 10 rentals, the owner will pay $3,000.00.

Please email me if you would like me to send you a Keller Williams Rental Listing Agreement.

Key points that Shore Summer Rentals owners need to know from the TB-81R.

Example 2: This will apply to SSR owners.
Homeowner then decides to also post an advertisement to rent out his home on a different transient space marketplace (Marketplace B). Marketplace B charges Homeowner a fixed amount to post the advertisement. The advertisement contains Homeowner’s contact information. In order to rent the home, Customer must contact and pay Homeowner directly. Since this transaction was not solely consummated through a transient space marketplace, Marketplace B is not required to collect and remit applicable taxes on behalf of Homeowner. Since all of Homeowner’s sales were not solely consummated through a transient space marketplace, Homeowner is required to register with the Division of Revenue and Enterprise Services (DORES) and must collect all applicable taxes from Customer and remit them to the Division for all transactions that result from posting an advertisement on Marketplace B. 

If you are going to pay the taxes on your own (not using the firm we have partnered with) you will need to register with the NJ Treasury (instructions below).

If you would like to use the firm we have partnered with who will take care of submitting and filing for you for a one time $50 set up fee and then only $20 per month, check with them before registering. Contact them here. 

REGISTRATION 
Every person who charges for the rental of a transient accommodation is a seller and must register with the State for the collection and remittance of all applicable taxes, fees, or assessments by filing a business registration application (Form NJ-REG). Although the law requires registration at least 15 business days prior to commencing business, the registration process for persons charging for the rental of transient accommodations is unavailable until at least October 8, 2018. Please continue to check the Division’s website for updates on registering. 

To register with New Jersey, visit DORES website at https://www.state.nj.us/treasury/revenue/taxreg.shtml. Once registered, you will receive a letter containing additional filing and payment information. 

Sellers of transient accommodations that are already registered as a business with DORES need to update their tax registration to include Sales Tax, the State Occupancy Fee, the Meadowlands Regional Hotel Use Assessment (if applicable), and any other applicable taxes, fees, or assessments at https://www.state.nj.us/treasury/revenue/regrecords.shtml

 
 

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