Hotel Occupancy Tax Plummet due to COVID-19 in Parsippany

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Fairfield Inn & Suites by Marriott, located at  3535 Route 46 East at Cherry Hill Road was closed for months due to COVID-19



PARSIPPANY — Of all the industries devastated by COVID, hotels have perhaps been hit the hardest — and far worse than occupancy rates would suggest.

The Township of Parsippany-Troy Hills passed an ordinance on August 12, 2003, requiring a 3% charge for every occupancy of a hotel or motel room in the Township of Parsippany-Troy Hills effective July 1, 2004.  This amount is the maximum authorized amount approved by the State of New Jersey. (Click here to download ordinance). The Municipal Occupancy Tax is in addition to the State Occupancy Fee and the New Jersey Sales Tax.

The sign that was posted on the door of Fairfield Inn

One of Parsippany’s hotels, as an example, Fairfield Inn & Suites by Marriott, located at 3535 Route 46 East at Cherry Hill Road has been closed for months due to COVID-19.  They recently reopened on May 6, 2021, after being closed for over a year. Other Parsippany hotels have been experiencing single-digit occupancies during COVID-19 causing Parsippany to lose drastic amounts in Municipal Occupancy Tax.

Fairfield Inn & Suites by Marriott, located at  3535 Route 46 East at Cherry Hill Road

In 2019, the Township received $2,662,442.93 in Municipal Occupancy Tax revenue.

In 2020, the amount of Municipal Occupancy Tax was a little over 39% of the 2019 revenue or $1,040,512.04.

Municipal Occupany tax from hotels from January through April was down 75 percent from the same time in 2019. That is a difference of over $500,000 just the first four months of 2021.

The Municipal Occupancy Tax is not imposed when the occupant is a New Jersey State or federal agency, instrumentality, or political subdivision; the United Nations; or any other international organization of which the United States is a member as long as the occupancy is paid with government funds; space is rented for the purpose of assembly (e.g. a meeting, seminar, wedding, etc.); or occupancy lasts for at least 90 consecutive days.

Actual (or Budget) January February March April May
2019 2,662,442.93 165,472.54 173,714.55 180,070.91 180,866.16 199,537.83
2020 1,040,512.04 192,837.25 180,064.38 168,928.80 160,474.93 71,664.76
2021 2,400,000.00 37,554.50 47,601.89 38,664.79 49,470.85

 

June July August September October November
2019 219,020.64 229,716.72 255,864.77 306,714.98 278,236.09 221,554.96
2020 14,645.07 16,406.91 30,277.75 27,069.61 94,211.81 40,698.73
2021

 

December
2019 251,662.78
2020 43,232.04
2021

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