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State Lawmakers Tax Everything that Moves Online

State Lawmakers Tax Everything that Moves Online

Online sellers aren’t the only ones scrambling to comply with a web of sales tax laws from myriad jurisdictions. State lawmakers are targeting everything that moves online, as residents of New Jersey are discovering.

Residents along the Jersey Shore are fuming about a tax on lodging rented through services like Airbnb that went into effect in October. Short Term Rentalz reported yesterday, “Hosts who rely on the short-term rental market for income are angry at state and local governments who are cracking down on sites such as Airbnb as they fear being caught out by new taxes and regulations.”

The publication pointed out that many homes in that area had been renting to summer tourists long before Airnbnb and said some residents have formed a group called the NJ Shore Rentals Collection to lobby lawmakers.

Avalara wrote about the New Jersey tax in the fall, writing, “As of October 1, a new lodging tax is in effect for all New Jersey short-term rentals that are either privately listed or arranged through online rental platforms such as Airbnb, VRBO, and HomeAway, according to a New Jersey Division of Taxation bulletin issued Friday.”

Where there’s a problem to be solved, a vendor will create a service to help, and Avalara jumped on the opportunity by creating a service for property owners for $20/month. “MyLodgeTax can help ease the burden of lodging tax compliance by taking care of registration and filing for you – for all the different taxes that may be required for your short-term rental.”

While that helps property owners comply, the fact remains that renters must still pay taxes, which owners fear will curtail rentals.

Sites like Airbnb and Uber like to talk about “the sharing economy,” but whenever money changes hands, it goes from sharing to transactional – and as users of the sites discover, many states want their cut.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.