Quick answer
Here's a practical rundown of what Shore owners need to know in 2026 to rent legally and sleep at night.
1. Municipal rental license
Most Shore towns require a rental license before you rent. The name changes by town: Wildwood Crest calls it a Mercantile Residential Rental License, Wildwood a Rental Housing Mercantile License, and North Wildwood a Room License.
- Cost: set by each town. Wildwood Crest charges $20 per sleeping room per year. North Wildwood's application lists $300 per condo plus $12 per sleeping room.
- Inspection: common. Wildwood Crest inspects every rental each year, and Wildwood inspects before issuing a first license.
- License number: some towns ask you to show it in your ads, so check with yours. Showing it on your listing is a good habit either way.
Step-by-step for Wildwood Crest: how to get a Wildwood Crest mercantile license.
2. Taxes: who owes what
New Jersey started taxing short-term rentals on October 1, 2018. On August 9, 2019, the law was narrowed. Today a short-term rental is taxed only in two situations:
- It's booked through a marketplace (Airbnb, VRBO and similar sites), where the guest books and pays through the platform. The platform collects and pays the tax.
- The owner offers 3 or more units for rent in New Jersey during the year. The state calls these "professionally managed units," and every rental of them is taxed, even direct bookings.
That means an owner with 1 or 2 units who rents directly to guests (through their own website, by phone or by email) generally has no NJ sales tax or occupancy fee to collecton those bookings. Stays of 90 or more nights in a row aren't taxed either.
The rates, when tax applies
Wildwood, Wildwood Crest and North Wildwood: 13.625% total
- NJ Sales Tax: 6.625%
- NJ State Occupancy Fee: 3.15% (reduced for the Wildwoods)
- Cape May County Tourism Tax: 2%
- Tourism Assessment: 1.85%
Most other Shore towns: 6.625% Sales Tax plus the 5% State Occupancy Fee, plus any municipal occupancy tax the town has adopted (up to 3%).
Who collects and pays
Airbnb and VRBO bookings
The platform collects the tax from the guest and pays it to the state. Nothing to file on your end for those bookings.
Direct bookings, 1 or 2 units
Generally nothing to collect. This is one reason booking direct is cheaper for guests.
Direct bookings, 3 or more units
- Register with the NJ Division of Taxation.
- Collect the tax from guests on every rental.
- File returns and pay the state on schedule.
This is general information, not tax or legal advice. If you own several units, rent through a broker, or aren't sure which group you fall in, check with the NJ Division of Taxation or your accountant. Source: NJ Division of Taxation, TB-81(R) and its transient accommodations FAQ.
Book direct, skip the extra fees
3. Insurance
Standard homeowners policies exclude short-term rental activity. If a guest slips in the shower or starts a fire with a candle, your homeowners carrier can deny the claim. Options:
- STR endorsement on your existing homeowners — ask your agent. Not every carrier offers it.
- Dedicated STR policy from a specialty insurer: Proper Insurance, CBIZ, Steadily, Obie are well-known options. Cost depends on the property, location and coverage limits, so get a few quotes. Flood coverage is usually a separate policy.
- Airbnb AirCover and VRBO Liability Insurance provide platform-level coverage ON TOP of your own, but should not replace your policy.
4. HOA / condo association approval
Many Shore condo associations have rules about short-term rentals — minimum rental periods, cap on total rental days per year, or outright bans. Check your HOA documents BEFORE you buy a license or list. Running an unauthorized STR in a no-STR building is a fast way to get fined or forced out.
5. Safety requirements
New Jersey sets a baseline for smoke alarms, carbon monoxide alarms and fire extinguishers, and each town's inspector may ask for more. Common items:
- Smoke alarms on every level and outside each sleeping area (hardwired, or 10-year sealed battery units). Some towns also want one in each bedroom.
- Carbon monoxide alarms near the sleeping areas
- A 2A-10B:C fire extinguisher (10 lb or less) mounted within 10 feet of the kitchen, either new with a receipt or tagged within the last 12 months
- Bedroom windows and exits that open and aren't blocked
- Street address visible from the street
Ask your town what its inspector checks before the visit.
6. House rules + Shore town quirks
- Noise ordinance — many Shore towns have quiet hours at night. Check your town's hours and put them in your house rules.
- Occupancy limits — your town may set a maximum number of guests. Stay within it.
- Parking — rules vary by town. Tell guests how many cars fit and where they can park.
- Trash collection — specific days + requirements. Include in welcome packet.
7. Reporting + record-keeping
Keep records at least 4 years (New Jersey's minimum for sales tax records). Many owners keep them 7 years to be safe:
- Every booking record (dates, guest name, rate, taxes collected)
- Cleaning + maintenance invoices
- Insurance declarations
- License renewal receipts
- Tax filings + remittance confirmations
If you're audited by the state, these are what you'll be asked for.
Frequently asked questions
What are the Jersey Shore short-term rental tax rates?+
When tax applies, Wildwood, Wildwood Crest and North Wildwood total 13.625%: 6.625% NJ Sales Tax, a 3.15% State Occupancy Fee, a 2% Cape May County Tourism Tax and a 1.85% Tourism Assessment. Most other Shore towns charge 6.625% plus a 5% State Occupancy Fee and any municipal occupancy tax (up to 3%). Since August 9, 2019, these apply only to marketplace bookings (Airbnb, VRBO) and to owners offering 3 or more units in New Jersey.
Does Airbnb collect NJ occupancy tax?+
Yes. Airbnb and VRBO collect the NJ taxes on bookings made through them and pay them to the state for you.
Do I collect occupancy tax on direct bookings?+
Usually not. Since August 9, 2019, an owner who offers fewer than 3 units for rent in New Jersey generally does not collect NJ sales tax or occupancy fees on rentals booked directly with them. Owners offering 3 or more units must register, collect and pay on every rental, including direct ones.
What insurance do Jersey Shore STR owners need?+
A dedicated short-term rental policy OR an STR endorsement on your homeowners. Standard homeowners insurance excludes STR activity — a guest slip-and-fall could be denied. Proper, CBIZ, Steadily, and Obie are well-known STR insurers. Flood coverage is usually a separate policy.
What’s a Mercantile License?+
It’s the rental license many Shore towns require before you rent. Wildwood Crest charges $20 per sleeping room per year and inspects every rental each year. Some towns ask you to show the license number in your ads, so check with yours.
Can I rent out my Shore condo if the HOA says no?+
No. HOA / condo association rules trump municipal licensing. Many Shore condo buildings prohibit short-term rentals or set strict minimum stay requirements. Verify your HOA docs allow STR activity before investing in licensing and listings.
I own 3 or more rental units. Do the rules change?+
Yes. If you offer 3 or more units for rent in New Jersey during the year, the state treats them as professionally managed units, and every rental is taxed, even ones booked directly with you. Register with the NJ Division of Taxation and collect from day one, since back taxes come with penalties and interest.