Ocean City Proposes 3% Tax on Online Short-Term Rentals

OCEAN CITY, N.J. — City Council is preparing to revisit a proposed tax on short-term rentals booked through online platforms. The ordinance would impose a 3 percent “transient accommodations fee” on bookings made through third-party rental services such as Airbnb or Vrbo. The proposal is scheduled for a first reading during Thursday’s council meeting at 6 p.m. at City Hall on Asbury Avenue. If approved, a second reading and public hearing are scheduled for July 17.
The measure is nearly identical to one introduced last year that initially applied to online rentals but was later amended to include hotels and motels. That amendment drew opposition from local business owners and was ultimately voted down. In its current form, the ordinance would only apply to online rental platforms.
Hotels, motels, and bed-and-breakfasts would not be affected. Supporters say this version of the ordinance avoids the concerns raised last year while generating new revenue without additional cost to the city. City officials estimate the tax could bring in about $1.8 million annually based on 2024 rental figures. They say the revenue would be collected by booking platforms and administered through the state. Short-term rentals booked through third-party services currently do not contribute any local tax, unlike traditional lodging, which is subject to state sales and occupancy taxes.