Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified New Jersey tax professional before filing.
New Jersey · USA · Short-term rental taxes
Short-Term Rental Taxes in New Jersey
Short term rental taxes in New Jersey: 6.625% sales tax, a 5% State Occupancy Fee and any town occupancy tax on marketplace bookings, an exemption for most direct rentals, and NJ income tax of 1.4%–10.75%.
The 30-Second Answer
- Short term rental taxes in New Jersey apply to transient accommodations booked through a transient space marketplace (Airbnb, Vrbo) or run as a professionally managed unit: 6.625% sales tax, the 5% State Occupancy Fee and any municipal occupancy tax of up to 3%.
- Since August 9, 2019, an owner who rents directly — no marketplace, fewer than three units — owes none of these taxes, and whole-home rentals executed by a licensed New Jersey real estate broker are also exempt when the broker's conditions are met. Stays of 90+ consecutive days are not taxed.
- Marketplaces collect and remit for you. You only need to register (Form NJ-REG) if you control three or more units and rent some of them outside a marketplace or broker.
- Net rent is taxed by New Jersey at 1.4%–10.75%. NJ has no passive/active split and a net rental loss is entered as zero — it cannot offset wages or other income categories. NJ-1040 is due April 15, 2027; nonresident owners file NJ-1040NR.
Deductions
What New Jersey STR Hosts Can Deduct
Expenses reduce your federal and New Jersey rental income alike — but in New Jersey a net loss stops at zero, so deductions only help up to your rental profit.
Sales tax and occupancy fees a marketplace collects are not your income. For a Shore house you also use yourself, split costs between rental and personal days under IRC §280A — and remember the federal 14-day rule if you rent it for 14 days or fewer.
Filing Calendar
Key Dates & Filing Calendar
Most hosts only face the income-tax calendar; owners of professionally managed units who take direct bookings also file sales tax returns quarterly.
Crossing into three units changes everything: once you control three or more rental units in New Jersey during the year, your direct bookings become taxable professionally managed units and you must register before you take them.
NJ Division of Taxation — TB-81R and Transient Accommodations FAQ; N.J.A.C. 18:24-11.2; NJ-1040 instructions
Income Tax Treatment
Schedule E or Schedule C for a New Jersey STR?
The federal choice drives self-employment tax; New Jersey then taxes the result under its own income categories, where rental losses do not cross over.
Passive rental — Schedule E
The usual route for Shore and lake houses
- Report rents and expenses on Schedule E; the net goes on the NJ-1040 as net gains or income from rents.
- No self-employment tax on net rental income.
- Depreciate the building over 27.5 years; New Jersey requires a GIT-DEP adjustment for bonus depreciation or Section 179.
- A net loss is entered as zero in New Jersey — it cannot offset wages, and it is not carried forward.
No income ceiling; federal passive loss rules and NJ category rules apply
Active business — Schedule C
For inn-style operations
- Applies when the average stay is 7 days or less and you provide substantial services such as daily housekeeping or breakfast.
- Net profit carries self-employment tax (15.3% up to the 2026 wage base of $184,500).
- The federal QBI deduction (Section 199A) may apply.
- Hotel-style services also rule out the real estate broker exemption from sales tax and the State Occupancy Fee.
No income ceiling; SE tax on profit up to $184,500
Depreciation
Depreciation for New Jersey STR Properties
Depreciation starts as a federal calculation, but New Jersey does not follow federal bonus depreciation or Section 179 expensing in full.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential rental building | 27.5 years (straight-line) | Exclude land; Shore land values are high, so support the split with the tax assessment or an appraisal. |
| Furniture, beds & appliances | 5 years (MACRS) | Federal bonus depreciation is a permanent 100% for property acquired after January 19, 2025 — New Jersey requires a GIT-DEP adjustment. |
| Roof, HVAC or storm repairs that upgrade | 27.5 years | Improvements are capitalised; true repairs are deducted in the year paid. |
| Decks, bulkheads, driveways & fencing | 15 years (MACRS) | Land improvements are depreciated separately from the house. |
Complete the Gross Income Tax Depreciation Adjustment Worksheet (GIT-DEP) whenever you claim federal bonus depreciation or Section 179 on the rental — your New Jersey depreciation will differ from your federal figure.
On sale, depreciation is recaptured federally at up to 25% (unrecaptured Section 1250 gain); New Jersey taxes the gain as net gains from the disposition of property, using your New Jersey basis.
Occupancy Tax
New Jersey Sales Tax & Occupancy Fees on Short Stays
Taxable vacation rental stays in New Jersey carry state sales tax, a State Occupancy Fee and, in some towns, a municipal occupancy tax — with special rates in a handful of places.
These charges apply to transient accommodations obtained through a transient space marketplace or offered as a professionally managed unit, for stays under 90 consecutive days. The bars show the standard statewide stack plus the maximum town tax.
11.625%–14.625% in most towns; 13.625% in the Wildwoods
NJ Division of Taxation — TB-81R and S&U-13; Airbnb Help Center article 2317
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Airbnb booking | Airbnb collects sales tax, the State Occupancy Fee and county and local occupancy taxes and remits them | Keep Airbnb's tax reports; no registration needed if every rental goes through marketplaces |
| Vrbo or Booking.com booking | The transient space marketplace must collect and remit the same taxes | Confirm your listing shows the lodging tax lines; keep the platform statements |
| Direct booking | Nobody, if you control fewer than three units; with three or more, you register and collect | Record the channel for each stay so you can show why no tax was charged |
The State Occupancy Fee is 1% in Atlantic City, Newark, Elizabeth and Jersey City, and 3.15% in Wildwood, North Wildwood and Wildwood Crest, where Cape May County adds a 2% tourism tax and a 1.85% assessment. A 3% Meadowlands Regional Hotel Use Assessment applies in the Meadowlands district.
Platforms
Airbnb Tax in New Jersey: What Platforms Collect
New Jersey puts collection squarely on transient space marketplaces — and on you only if you run three or more units outside them.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Form 1099-K when 2026 payouts exceed $20,000 and 200 transactions | Yes — 6.625% sales tax, State Occupancy Fee, county and local occupancy taxes on stays of 89 nights or less | Earnings summary in the host dashboard; tax forms by January 31 |
| Vrbo / Booking.com | Form 1099-K above the same federal thresholds | Yes — as transient space marketplaces they must collect sales tax, the occupancy fee and municipal occupancy tax | Annual payout summary in the owner or partner dashboard |
| Licensed real estate broker | No platform reporting; the broker may issue its own statements | Not taxable when the broker exemption conditions are met | Broker's owner statement |
| Direct bookings | No platform reporting | Not taxable for owners of fewer than three units; three or more — register and collect | Your own booking ledger |
Mixing Platforms, Brokers and Direct Guests?
Each channel is taxed differently in New Jersey: marketplace stays are taxed and collected for you, broker-executed whole-home rentals and small-owner direct stays are exempt. Track which channel each booking came through, and total your payouts yourself — the 1099-K threshold is tested per platform.
US Reporting: Form 1099-K, Not DAC7
DAC7 is an EU rule and does not apply in New Jersey. US platforms report on Form 1099-K once payouts exceed $20,000 and 200 transactions in a year; Form 1099-MISC/NEC uses a $2,000 threshold for payments after December 31, 2025. All rental income is taxable whether or not a form is issued.
Airbnb Help Center — New Jersey (airbnb.com/help/article/2317); NJ Division of Taxation TB-81R
Illustrative P&L — Jersey Shore House
Example for a Shore rental grossing $60,000 a year through Airbnb and Vrbo (sales tax and occupancy fees excluded). For illustration only — not tax advice.
Record-Keeping
Stay Audit-Ready: What New Jersey Hosts Should Keep
The Division of Taxation generally has four years from filing to assess more tax, and it can question whether a stay was taxable — keep proof of the booking channel.
| Keep | How long | Why |
|---|---|---|
| Platform tax reports showing sales tax and occupancy fees collected | At least 4 years after filing | Proves the marketplace, not you, collected on those stays |
| Booking log showing channel (marketplace, broker, direct) and stay length | At least 4 years | Supports exempt direct, broker and 90-day-plus rentals |
| Broker agreements and key-handover records | At least 4 years | Shows the real estate broker exemption conditions were met |
| Expense receipts, 1099-Ks and GIT-DEP worksheets | At least 4 years (6 if income may be understated by 25%+) | Substantiates Schedule E deductions and the New Jersey depreciation adjustment |
| Purchase records and depreciation schedules | Until 4 years after you sell | Needed to compute basis and depreciation recapture for both returns |
Count your units each January. The three-unit test for a professionally managed unit covers units you directly or indirectly own or control during the calendar year — including units held through an LLC or other entity you control.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
Rates verified September 2026 at the official pages below. Municipal occupancy tax rates vary by town — confirm with the Division of Taxation and a qualified New Jersey tax professional before filing.
- NJ Division of Taxation — TB-81R, Taxes Imposed on the Rental of Transient Accommodations — Marketplace and professionally managed unit rules, August 9, 2019 direct-rental and broker exemptions, NJ-REG, 90-day rule, fee rates. nj.gov/treasury/taxation/pdf/pubs/tb/tb81r.pdf
- NJ Division of Taxation — Transient Accommodations FAQ — Who must register (three or more units), direct rentals, broker exception. nj.gov/treasury/taxation/transientaccommodationsfaq.shtml
- NJ Division of Taxation — Tax Topic Bulletin S&U-13, Hotel Occupancies and New Jersey Taxes — 6.625% sales tax, 5% State Occupancy Fee and reduced rates, municipal occupancy tax up to 3%, Cape May County taxes. nj.gov/treasury/taxation/pdf/pubs/sales/su13.pdf
- Airbnb Help Center — Occupancy tax collection in New Jersey — State, Wildwoods, Meadowlands and local taxes Airbnb collects for stays of 89 nights or shorter. airbnb.com/help/article/2317
- NJ Division of Taxation — 2025 NJ-1040 Instructions — Rents category, net loss entered as zero, no active/passive distinction, GIT-DEP adjustment, April 15 due date. nj.gov/treasury/taxation/pdf/current/1040i.pdf
- NJ Division of Taxation — New Jersey Tax Rate Schedules (2020 and after) — 1.4% to 10.75%. nj.gov/treasury/taxation/pdf/current/njtaxratesch.pdf
- NJ Division of Taxation — 2025 NJ-1040NR Instructions — Nonresident return for New Jersey-source income. nj.gov/treasury/taxation/pdf/current/1040nri.pdf
- N.J.A.C. 18:24-11.2 — Filing of monthly remittance and quarterly returns — ST-50 quarterly returns due the 20th; monthly remittances above $30,000 a year. law.cornell.edu/regulations/new-jersey/N-J-A-C-18-24-11-2
- IRS — Publication 527, Residential Rental Property — Schedule E reporting, depreciation and personal-use rules. irs.gov/publications/p527
Questions
Frequently Asked Questions — New Jersey STR Taxes
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