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Any New Jersey municipality, other than Newark, Jersey City, Atlantic City, Elizabeth, Wildwood, North Wildwood, and Wildwood Crest is authorized to amend or adopt an ordinance to impose a Municipal Occupancy Tax of up to 3% on charges for hotel and motel occupancies in that municipality. The Municipal Occupancy Tax is in addition to the State Occupancy Fee and the New Jersey Sales Tax.
Newark, Jersey City, Atlantic City, Elizabeth, Wildwood, North Wildwood, and Wildwood Crest are prohibited from enacting a Municipal Occupancy Tax because those municipalities already impose local taxes or fees on such occupancies.
The majority of municipalities that have adopted a Municipal Occupancy Tax have authorized the tax at a rate of 3%. However, Cape May City (Cape May County), West Long Branch Borough (Monmouth County) and Berkeley Township (Ocean County), impose the tax at the rate of 2%.
The Municipal Occupancy Tax List shows the municipalities that have adopted this tax and the applicable rate.
Adopted Municipal Ordinances must be sent to:
New Jersey Division of Taxation
Audit Selection & Technical Support
P.O. Box 264
Trenton, NJ 08695-0264
The ordinance must be accompanied by a list of names and addresses of the hotels and motels within the municipality. The municipality will receive a letter acknowledging receipt of the ordinance and noting the effective date of the Municipal Occupancy Tax.
Note: The tax is effective on the first day of the first full month following 90 days after the Division has received the adopted ordinance. Questions concerning the municipal ordinance should be directed to the municipality.
The Municipal Occupancy Tax is imposed directly on the occupant and must be separately stated as “Municipal Occupancy Tax” on any bill, invoice, or other document provided to the occupant.
Note: Sometimes a hotel or motel will sell package deals that include other components, such as meals, tickets, admissions, transportation, etc. In that case, the Municipal Occupancy Tax should be charged only on the amount related to the room/lodging facility occupancy. However, when a continental breakfast or similar complementary service is offered, it is considered included in the room price and, therefore, is subject to the Municipal Occupancy Tax.
The hotel or motel must file Form HM-100 monthly to remit the Municipal Occupancy Tax collected. The hotel or motel must keep detailed and accurate records of all transactions.
The Municipal Occupancy Tax is not imposed when: