Beach to implement 3% tax on online home-rental sites

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POINT PLEASANT BEACH — The borough will raise its transient-accommodation tax on Airbnb and other online home-rental sites to 3 percent.

The increase, from 1.5 to 3 percent, is necessary for the borough to collect the tax as permitted by the state, according to state officials. Municipal transient-accommodation tax must be set at 3 percent or nothing, officials told the borough in January. 

The borough council approved the increase during a virtual council meeting held March 17.

According to Mayor Paul Kanitra, more than 100 Airbnbs are rented in Point Pleasant Beach during the summer months.

The 2019 tax of 1.5 percent went uncollected, leading to the borough missing out on more than $30,000 in revenue, Mayor Kanitra said.

The borough council approved that tax rate last year after receiving initial state guidance that municipalities could set the rate at any amount up to three percent, according to Mayor Kanitra and Councilman Andy Cortes. 

According to Mr. Kanitra, state officials alerted the borough last month and explained that they made several unsuccessful attempts to notify his predecessor, then-Mayor Stephen Reid, of the change during the summer. 

Mr. Reid, however, told The Ocean Star that he had not heard from anyone.

“We never actually received any of the benefits of passing the ordinance last year,” Mayor Kanitra said, “So, the borough lost out on what we calculated as potentially around $35,000 or so last year.”

Had the tax been set at three percent in 2019, it would have been collected, officials said. But Mr. Cortes said the council acted in the belief it could impose the lower 1.5 percent rate, to minimize the impact on renters, to whom the tax would likely be passed along.

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