Thank New Jersey State Assembly for Support of A3101 to Increase State Support for Arts, History, & Tourism!
On November 25, A3101, which would restore state funding for arts, history, and tourism to FY05 levels of support, passed unanimously in the New Jersey General Assembly. State appropriations for the New Jersey State Council on the Arts, New Jersey Historical Commission, New Jersey Division of Travel & Tourism, and New Jersey Cultural Trust have been frozen at FY04 levels, the current minimum allowed by law, for the past 10 years. The bill, whose primary sponsors are Assemblywoman Patricia Egan Jones (D-Dist. 5), Assemblyman Daniel Benson (D-Dist. 14), and Assemblyman Bruce Land (D-Dist.1), must now move to the New Jersey Senate as S247 in its next voting session, which is on December 16. If passed, it will then move to Governor Murphy’s desk to be signed into law.
Please stay tuned for action alerts related to S247. In the meantime, take a moment to thank your New Jersey Assembly representatives for voting in support of A3101.
History of the Hotel Occupancy Tax
In 2003 the industry, in concert with the Arts, History and Cultural communities worked cooperatively with the state to create a stable, recurring, NEW revenue source for these efforts by enacting the Hotel Occupancy Tax.
The Hotel Occupancy Tax was enacted to:
- Generate funding for the Office of Travel and Tourism’s promotional, advertising and cooperative marketing activities
- Set forth an initiative to grow revenue to contribute to the economic stimulus of the state
- Fund cultural and historical grants and programs
- Allow municipalities to add a new source of revenue generation other than the property tax
- Give the State a share of the funds for general use
- And once and finally stabilized the funding mechanism for an industry that largest by guaranteeing a minimum funding level and, if breached, trigger the repeal of the tax
NEW JERSEY REGISTER
VOLUME 42, NUMBER 1
MONDAY, JANUARY 4, 2010
DIVISION OF TAXATION
REGULATORY SERVICES BRANCH
Notice of Receipt of and Action on Petition for Rulemaking Sales and Use Tax
Amend Definition of Hotel; New Definition of Transient Room Rentals; New Definition of Transient Occupancy N.J.A.C. 18:24-3.2
Petitioner: Greater Wildwood Hotel-Motel Association
Take notice that on October 8, 2009, the Department of Treasury, Division of Taxation (Regulatory Services Branch) received a petition for rulemaking from Barry, Corrado, Grassi & Gibson, PC on behalf of the Greater Wildwood Hotel-Motel Association seeking to amend N.J.A.C. 18:24-3.2. This rule currently limits the scope of “hotel,” thereby excluding from the application of sales tax sales of certain types of transient rentals. The petitioner seeks an amendment of the existing “hotel” definition and the addition of “transient room rentals” and “transient occupancy.” The Department has determined to deny the petition for the reasons set forth below:
1. The petitioner requests that the definition of “hotel” include all types of real property “made available to the public on a transient basis” regardless of any services or amenities offered by the owner or manager of the property. The Division has consistently interpreted the definition of hotel narrowly as to limit the application of sales tax to occupancies rather than real property rentals. The petitioner’s request to expand the definition would not provide clarity to the industry but would expand the imposition of sales tax to a wide range of transactions that are not currently taxed under the Sales and Use TaxAct, N.J.S.A. 54:32B-1 et seq.
The Division recognizes, however, that manner in which the hotel industry operates has evolved over time and feels that an expansion of the “hotel” definition found in N.J.A.C. 18:24-3.2 would be helpful to the industry and taxpayers alike. The Division is currently drafting a regulatory proposal that it plans to publish shortly.
2. The petitioner requests that the rule be further amended to define two new terms, “transient room rentals” and “transient occupancy,” as any room rental of less than 90 days duration. The sales tax imposition found in N.J.S.A.54:32B-3(d) provides for sales tax on the “rent for every occupancy of a room or rooms in a hotel in this State,” and carves out an exception for permanent residents, which are defined as “any occupant<<-s->> of any room or rooms in a hotel for at least 90 consecutive days.”N.J.S.A. 54:32B-2(m).
As all occupancies in hotels, less than 90 days in duration are taxed under the imposition outlines above, creating a label for all taxable occupancies is unnecessary.
In determining whether a facility operates as a hotel, the Division currently looks at a number of factors, including whether a facility is open to transients. This is not intended to define the type of occupancy, but to assist the Division in fleshing out whether the facility acts in a manner that is consistent with its interpretation of “hotel.” A reference to this approach can be found in the Division's current rules. The Division’s regulatory proposal that will be published shortly will address more specifically the Division approach to determining whether a facility to be operating as a “hotel.”
In accordance with N.J.A.C. 1:30-4.2 and 18:1-2.3(b), the Department has mailed to the petitioners a copy of this notice of action.
42 N.J.R. 92(a)END OF DOCUMENT