WILDWOOD — The Greater Wildwood Hotel and Motel Association (GWHMA) filed a lawsuit July 31 to compel the State of New Jersey to assess sales and room occupancy taxes on condominiums and other facilities that are rented on a transient basis and are used as motels or hotels.
The complaint, filed in state tax court, asserts that the New Jersey Division of Taxation’s policy of excluding all transient rentals that are not conventional hotels or motels from the sales tax is “improper and violates both the statute and the division’s own implementing regulations.”
Attorney Frank Corrado, who is representing the GWHMA, told reporters at a press conference that the lawsuit is “about equal application of the tax law.”
Hotels and motels have to rent rooms with an additional 12 percent, seven percent sales tax and five percent room tax. Condominiums, are marketing to potential guests, that they are exempt from that additional 12 percent.
“It isn’t creating a level playing field,” said Steve Tecco, president of the association and owner of the Armada motel.
Bruce Smith, chairperson of the Board of the Directors of the GWHMA and owner of the Tangiers Motel, explained that under the law now a former motel owner, who decides to change to condo form of ownership, has a distinct price advantage over neighboring motels.
Tecco said that the discrepancy in following through with the law, has cost the state mil-lions in revenue. He said in 2007 a research and marketing firm, Global Insight, used figures from 2006 and reported that collected taxes and condo rentals would result in an additional $345 million in revenue for the state.
For more on this story, please see the Herald’s print edition on August 6.
Contact Suit at: (609) 886-8600 ext. 25 or lsuit@cmcherald.com
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