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As New Jersey debates taxes on Shore rentals, Airbnb says it had record-setting weekend at Shore

Despite a new tax on short-term rentals in New Jersey, Airbnb said it had a record number of rentals at the Shore over Memorial Day weekend.

The beach in Ocean City May 27, 2019. Airbnb said it had the most rentals ever in Ocean City over Memorial Day weeekend.
The beach in Ocean City May 27, 2019. Airbnb said it had the most rentals ever in Ocean City over Memorial Day weeekend.Read moreTOM GRALISH / Staff Photographer

Memorial Day weekend opened peak season at the Jersey Shore — its first since a new tax on short-term rentals took effect. And the results?

For the popular home-sharing website Airbnb, at least, there were a record number of rentals at the Shore despite the tax. The company released figures this week, as New Jersey lawmakers consider tweaking the new tax in response to complaints from homeowners that the levy would hurt tourism at the Shore.

The New Jersey Assembly unanimously passed a bill last week that would exempt owners from paying taxes on rentals if they deal directly with clients instead of using a marketplace, such as Airbnb or VRBO. An identical bill in the Senate was approved by the Community and Urban Affairs Committee this month. The proposal still needs to be reconciled and signed by Gov. Phil Murphy.

More than 6,300 Shore visitors over Memorial Day weekend rented through Airbnb, an increase from 4,800 guests for Memorial Day last year, according to company spokesperson Liz DeBold Fusco.

Ocean City was the top Airbnb rental destination at the Shore for the weekend, followed by Atlantic City.

Saturday night set a record for Airbnb rentals in Ocean City, with 4,700 visitors, the company said. (Not all of those Ocean City rentals are included in the overall number of rentals at the Shore, DeBold Fusco said, because Airbnb narrowly defined Shore rentals as those that are close to the beach.)

Airbnb rentals at the Shore had an average rate of $141 a night, the company said, and hosts together made more than $1 million over the weekend.

Airbnb objects to the latest attempts by lawmakers to tweak the rental tax, which took effect in October and applies the 6.625 percent state sales tax and 5 percent occupancy fee to short-term rentals. State officials expect it will raise $8 million by the end of the fiscal year in June.

A group of Shore homeowners, meanwhile, has hired a lobbyist to push for changes to the tax. One homeowner testified before a Senate committee this month that he is having a hard time finding renters for his Long Beach Island home. Shore rentals facilitated by licensed real estate brokers are already exempted from the tax, but the levy affects owners who do not use real estate companies.

Democratic Assembly members who sponsored the bill exempting some rentals from the tax said in a statement last week after the full Assembly vote that it is important to protect summer tourism at the Shore. The tax, which was aimed at Airbnb and other companies that facilitate home sharing, was never intended to hurt private homeowners, the lawmakers said.

“The legislation approved [Thursday] will help property owners who rely on word of mouth, signs, social media, and long-standing customers to keep their rentals booked through the summer,” the statement said. “It will help Shore businesses keep customers flocking to their doors. And it will help tourists afford to have the vacation of their dreams right here at the Jersey Shore.”

Airbnb has not yet added up how much tax money it collected over the holiday weekend, DeBold Fusco said, but “we can safely assume it’s significant.”