A hotel room in New Jersey carries a minimum of 11.625% in state taxes: a 6.625% sales tax plus a 5% state occupancy fee. That’s the floor. Depending on the city or region, municipal occupancy taxes and regional assessments can push your total to 13.625% or 14.625%, and Atlantic City follows an entirely separate structure. Here is how the New Jersey hotel tax breaks down on your bill, and when you can avoid paying it.
The Two Statewide Taxes Every Guest Pays
New Jersey’s 6.625% sales tax applies to every hotel, motel, and short-term room rental in the state, from budget motels to luxury resorts.1Justia. New Jersey Code 54:32B-3 – Taxes Imposed On top of that, the state charges a separate 5% occupancy fee on the same room charge.2Justia. New Jersey Code 54:32D-1 – State Hotel, Motel, and Transient Accommodation Occupancy Fee Together they produce the 11.625% baseline that every guest pays before any local charges apply.3State of New Jersey. New Jersey Hotel/Motel and State Occupancy Fee Information Both appear as separate line items on your final bill.
Municipal Occupancy Tax
Many New Jersey towns add their own occupancy tax of up to 3% on the room charge.4Justia. New Jersey Code 40:48F-1 – Tax Authorized, Certain Not every municipality uses this authority. Some charge the full 3%, some charge less, and some charge nothing at all. Where the town does impose the full rate, your combined state and local tax reaches 14.625%.
Seven cities are carved out of this standard municipal tax because they have their own lodging charges: Newark, Jersey City, Atlantic City, Elizabeth, Wildwood, North Wildwood, and Wildwood Crest.5State of NJ – Department of the Treasury – Division of Taxation. New Jersey Hotel and Motel Occupancy Fee Information – Municipal Occupancy Tax
Atlantic City Hotel Taxes Work Differently
Atlantic City runs on its own tax framework. The centerpiece is a 9% luxury tax on room rentals, restaurant meals, and entertainment admissions.6Cornell Law Institute. N.J. Admin. Code 18:25-1.5 – Tax Rates7State of New Jersey. Atlantic City Luxury Tax To keep the layered rates from spiraling, state law caps the combined luxury tax, sales tax, and occupancy fee at 13.625%. The state sales tax on items subject to the luxury tax drops to 3.625%, and the state occupancy fee drops to 1%.8New Jersey Department of the Treasury. Atlantic City Luxury Tax, New Jersey Sales Tax and Other Fees – ANJ-172Justia. New Jersey Code 54:32D-1 – State Hotel, Motel, and Transient Accommodation Occupancy Fee
If you stay in a casino hotel, expect one more charge: a flat $2-per-night surcharge on each occupied room.9Justia. New Jersey Code 5:12-152.1 – Casino Hotel Facility Surcharge, Rate It’s small next to the percentage taxes, but it stacks on top of them.
Extra Taxes in Wildwood and the Meadowlands
Two regions layer their own lodging charges on top of the state rates. In Wildwood, North Wildwood, and Wildwood Crest, a 2% Cape May County tourism sales tax applies to hotel rooms, restaurant meals, and amusement admissions. Combined with the 6.625% state sales tax, the sales tax portion of your bill runs 8.625% before the state occupancy fee is added.10New Jersey Division of Taxation. Cape May County Tourism Sales Tax
Hotels in the Meadowlands district pay a 3% regional hotel use assessment that gets passed to guests, sitting on top of the state sales tax, the state occupancy fee, and any municipal occupancy tax that applies.11NJ.gov. Meadowlands Regional Hotel Use Assessment
Airbnb, VRBO, and Other Short-Term Rentals
A vacation rental booked through Airbnb, VRBO, or a similar platform is taxed the same way as a hotel: state sales tax, state occupancy fee, and any local or regional charges apply. Under New Jersey law, any rental obtained through a “transient space marketplace” is taxable regardless of who owns the property.12NJ Treasury. Taxes Imposed on Charges for the Rental of Transient Accommodations The platform usually collects and remits these taxes for the host, so you’ll see them itemized on your booking.
A narrow exemption exists for direct owner bookings. If the owner rents fewer than three units statewide during the year, lists the property outside any online marketplace, and the guest arranges the stay directly, no taxes are owed. Rentals arranged by a licensed New Jersey real estate broker can also qualify, but only for private residential property, with key pickup handled offsite and no hotel-style services like housekeeping.13New Jersey Division of Taxation. Transient Accommodations Frequently Asked Questions Owners who rent three or more units in a year owe these taxes even on direct bookings.
When You Don’t Have to Pay Hotel Tax
The 90-Day Permanent Resident Rule
Stay in the same hotel room for at least 90 consecutive days and New Jersey treats you as a permanent resident for that stay. The hotel stops charging sales tax, state occupancy fee, and any municipal occupancy tax, and you’re entitled to a refund of what you already paid over the entire 90-day period, not just from day 90 forward.14State of New Jersey. New Jersey Hotel and Motel Occupancy Fee Information – Permanent Residents This is the rule that matters for extended corporate assignments, relocations, and long housing transitions.
To claim the refund, file through the New Jersey Tax Portal at taxportal.nj.gov with your receipts, proof of tax paid, and a calculation of the refund amount. Claims covering 25 or more transactions have to be submitted with a spreadsheet.
Government Travel
Federal and state government agencies can avoid New Jersey sales tax on hotel stays only when the room is billed directly to the agency through a centrally billed account. If a government employee pays with a personal card and gets reimbursed, the exemption does not apply, even for legitimate official travel.15GSA SmartPay. New Jersey Tax Information Who holds the card matters more than the purpose of the trip.
Nonprofit Organizations
Organizations with an ST-5 exempt organization certificate from the Division of Taxation can avoid sales tax on hotel stays related to their work, but only if the organization’s own funds pay for the stay and a copy of the ST-5 is provided to the hotel at check-in. Employee payment with reimbursement afterward does not qualify.16Department of the Treasury. Sales Tax Information for Exempt Organizations
Foreign Diplomats
Foreign diplomatic and consular personnel can claim exemption by presenting a U.S. Department of State Diplomatic Tax Exemption Card at check-in. The cardholder must personally initiate and pay for the transaction; the card cannot be used by family or colleagues.17State of New Jersey Department of the Treasury. Diplomatic/Consular Sales Tax Exemptions