N.J. Admin. Code § 18:25-2.4

Current through Register Vol. 56, No. 24, December 18, 2024

Section 18:25-2.4 - Exemption from luxury tax on room and apartment rentals

(a) The following room and apartment rentals are exempt from luxury tax.

1. The rental of a room or rooms by a person who resides in it as a permanent resident of Atlantic City. A permanent resident is any person who:

i. Will occupy a room or rooms under lease for a term of one year or more; or

ii. Can show a permanency of residence through other objective factors; such as, voter registration, postal records, driver's license, work records, etc.

2. The rental of a room or rooms or an apartment by any person where the rent is paid directly by an agency of New Jersey State, county, or municipal government, or by any agency of the United States of America. Where the rent is not paid directly by the governmental agency, it is subject to the luxury tax.

i. For example: A State government employee is in Atlantic City on government business. The employee pays for the occupancy of a room in a motel and the expense will be reimbursed by an agency of State government. The rental is subject to luxury tax.

3. The room rents received by an exempt organization. This exemption is limited to rentals that are directly related to the purpose for which the exempt organization was organized. (See N.J.A.C. 18:24-9.1)

4. The isolated rental of a room, apartment, or single family dwelling by a person not engaged in a course of repeated and successive similar transactions.

5. That portion of a room rental attributable to the provision of food service to the occupant or boarder.

6. The rental of apartments for a period of eight weeks or more.

(b) Every rental of a room or rooms or apartment is subject to luxury tax unless exempt from tax as provided in (a) above. There is no exemption from luxury tax by reason of an exemption from sales tax in this State.

For example, an organization that has applied for and received a New Jersey Exempt Organization Certificate (Form ST-5) arranges for the occupancy of rooms in a hotel for members attending a convention. The rental charge is invoiced to and directly paid by the organization. The room rentals are subject to luxury tax because the law does not provide an exemption for such organizations. However, the room rentals are not subject to sales tax provided the vendor is given a copy of the organization's Form ST-5 and payment is made from the organization's funds. (See N.J.A.C. 18:24-9.12)

N.J. Admin. Code § 18:25-2.4

Amended by 50 N.J.R. 2341(b), effective 11/19/2018