3% Occupancy Tax Gets Narrow Approval In Ocean City

OCEAN CITY, NJ — In a 4-3 vote, Ocean City Council approved implementing a 3 percent occupancy tax on rental properties booked through the transient marketplace, meaning rentals like Airbnb and VRBO.

That tax, paid by the renter, would help generate additional revenue for the city, supporters of the ordinance said. But its opponents said it would be squeezing families in an already difficult economy.

This is the second time council has tried to implement such a tax. Read more: Rental Tax To Be Revisited In Ocean City

"Most of our other surrounding towns have a fee similar to this," said Councilman Dave Winslow. "You go to Cape May, you go to Wildwood, you go to Somers Point, you go to Disney World. You go to a lot of other places, you go to Atlantic City. They have a fee, and they haven't seen a detrimental effect on their housing market."

Winslow estimated $1.8 million in revenue for the first year with this new tax.

Councilman Jody Levchuk, who is in the rental business, supported the ordinance as he said rentals in Ocean City are changing. Transient stays are becoming more popular, and are often shorter term - possible even only a night or two - which increases the amount of people who stay in a house during the week.

This increases the cost of running Ocean City, he said.

"All that's great, but the cost has to be covered somewhere," Levchuk said.

However, some argued that the cost was too high for families.

Brian Salvo, a resident who rents out property through Airbnb, called it unfair.

"We're struggling, you know, and the economy's not getting any better," Salvo said.

Councilman Keith Hartzell also disapproved of the tax, saying he wouldn't support any tax until the city's budget is "under control."

"You never solve a budget issue with another new tax," Hartzell said.

The tax was approved with Council President Terry Crowley, Vice President Pete Madden, Levchuk and Winslow voting yes. Voting no were Sean Barnes, Tony Polcini and Hartzell.

The ordinance must be approved by the state before it goes into effect in Ocean City.