The Real Deal New York

Newark to regulate Airbnb, charge 6% hospitality tax

Jersey City struck a similar deal with the short-term rental giant last year
April 12, 2016 12:00PM

From left: Ras Baraka and Airbnb's founders Joe Gebbia, Nathan Blecharczyk and Brian Chesky

From left: Ras Baraka and Airbnb’s founders Joe Gebbia, Nathan Blecharczyk and Brian Chesky

Newark agreed to legalize and tax Airbnb, becoming the second city in New Jersey to do so.

The city’s mayor Ras Baraka will announce a plan to charge the short term rental service a 6 percent tax, equal to the rate paid by Newark’s hotels, the Wall Street Journal reported.

The mayor said he expected the city to collect about $750,000 in taxes on this service over the next year.

“To bring it under regulation is only fair for other businesses that are doing business,” Mr. Baraka said. “We need to be able to get the revenue from this. The citizens of this city need to be able to benefit.”

While the service remains heavily regulated in New York, it’s recently made over two dozen such agreements in cities around the country, a spokesperson for the company told The Real Deal.

Jersey City’s mayor announced a push back to legalize the service back in October 2015. The city collected $41,000 in taxes from the service in February.

Representatives of the hotel industry grudgingly accepted the new agreement, the Journal reported.

“As long as the regulation and compliance and taxing is similar to traditional hotels, then at least it’s fair,” Marilou Halvorsen of the New Jersey Restaurant and Hospitality Association told the paper. [WSJ] – Ariel Stulberg