Ocean City Short-Term Rental Regulations

Last verified: 2026-07-04
TL;DR
Ocean City requires Mercantile License (Rental Registration) ($175 total for a single/duplex unit not occupied by the owner (Dwelling Unit Rented For Less Than 175 Days): $30.00 mercantile license fee + $145.00 municipal tourism assessment. Higher tiers apply for 3-5 unit structures ($125 + $300 assessment) and each additional unit (+$10).) with no primary-residence requirement. Combined tax rate is 11.625% on marketplace-booked short-term rentals (6.625% NJ Sales Tax + 5% NJ State Occupancy Fee); Ocean City's local 3% Municipal Occupancy Tax (effective 11/1/2025) currently applies to hotel/motel occupancies only and has not been extended to marketplace-booked transient accommodations. No annual day limit.
Disclaimer
This information is provided for general informational purposes only and does not constitute legal, tax, or regulatory advice. Short-term rental regulations change frequently. Always verify current requirements with your local government before listing your property or making investment decisions.
Key Requirements at a Glance
Permit ✓ Required — Mercantile License (Rental Registration) ($175 total for a single/duplex unit not occupied by the owner (Dwelling Unit Rented For Less Than 175 Days): $30.00 mercantile license fee + $145.00 municipal tourism assessment. Higher tiers apply for 3-5 unit structures ($125 + $300 assessment) and each additional unit (+$10).)
Primary Residence Not required
Annual Day Limit No limit
Tax Rate 11.625% on marketplace-booked short-term rentals (6.625% NJ Sales Tax + 5% NJ State Occupancy Fee); Ocean City's local 3% Municipal Occupancy Tax (effective 11/1/2025) currently applies to hotel/motel occupancies only and has not been extended to marketplace-booked transient accommodations
Max Penalty $500 fine and/or up to 90 days imprisonment per violation
Insurance $500,000 minimum liability insurance for negligent acts and omissions (per N.J.S.A. 40A:10A-1), with the City of Ocean City listed as certificate holder required

New to short-term rentals? Jump to the compliance checklist →

Permit & Licensing

Mercantile License (Rental Registration)

FeeAmount
Initial cost$175 total for a single/duplex unit not occupied by the owner (Dwelling Unit Rented For Less Than 175 Days): $30.00 mercantile license fee + $145.00 municipal tourism assessment. Higher tiers apply for 3-5 unit structures ($125 + $300 assessment) and each additional unit (+$10).
RenewalSame fee schedule as initial license; billed annually for the license period June 1 to May 31

This permit type does not require primary residence.

Application Process

Apply to the City Clerk / Licensing Office for the Mercantile License (Rental Registration) on forms provided by the City; provide required information; maintain and annually register a liability insurance certificate of at least $500,000 naming the City as certificate holder; license runs June 1 to May 31, with a late fee if unpaid by June 1

Tax Obligations

TaxRateAuthority
New Jersey Sales Tax 6.625% NJ Division of Taxation
New Jersey State Occupancy Fee 5% NJ Division of Taxation
Ocean City Municipal Occupancy Tax (hotel/motel occupancies) 3% City of Ocean City

Combined rate: 11.625% on marketplace-booked short-term rentals (6.625% NJ Sales Tax + 5% NJ State Occupancy Fee); Ocean City's local 3% Municipal Occupancy Tax (effective 11/1/2025) currently applies to hotel/motel occupancies only and has not been extended to marketplace-booked transient accommodations of gross rental income.

Collection: For bookings made through a marketplace (e.g., Airbnb, Vrbo), the marketplace collects and remits NJ Sales Tax and the State Occupancy Fee on the host's behalf. Hosts who directly rent a "professionally managed unit" (3+ NJ rental units) without a marketplace must register with the state and self-collect/remit.

Filing: Monthly (Form HM-100, due the 20th of the month following the month the tax was collected)

Rental Limits

Ocean City does not impose an annual cap on the number of nights you can rent.

Zoning & Restrictions

Check with local government

Insurance & Safety

Insurance

Operators must maintain at least $500,000 minimum liability insurance for negligent acts and omissions (per N.J.S.A. 40A:10A-1), with the City of Ocean City listed as certificate holder in insurance covering the property's use as a short-term rental.

Safety & Operating Requirements

Penalties for Non-Compliance

Platform Requirements

Booking platforms ("transient space marketplaces") that facilitate the rental transaction must collect and remit NJ Sales Tax and the State Occupancy Fee on the booking, and must retain transaction records (including the municipal transient accommodation registration number, if applicable) for four years

Compliance Checklist

Follow these steps to legally operate a short-term rental in Ocean City:

  1. Meet safety requirements. Smoke detector, carbon monoxide alarm, and portable fire extinguisher compliance certificate required (Fire Prevention office).
  2. Obtain liability insurance. $500,000 minimum liability insurance for negligent acts and omissions (per N.J.S.A. 40A:10A-1), with the City of Ocean City listed as certificate holder minimum.
  3. Apply for Mercantile License (Rental Registration). Submit application + $175 total for a single/duplex unit not occupied by the owner (Dwelling Unit Rented For Less Than 175 Days): $30.00 mercantile license fee + $145.00 municipal tourism assessment. Higher tiers apply for 3-5 unit structures ($125 + $300 assessment) and each additional unit (+$10). fee.
  4. Register for tax accounts. Set up lodging tax accounts with New Jersey Division of Taxation (state Sales Tax and State Occupancy Fee); City of Ocean City Licensing Office (Mercantile License / Rental Registration fees).
  5. Display your permit number. Include your permit/license number in all listings and advertisements.
  6. Collect and remit taxes. 11.625% on marketplace-booked short-term rentals (6.625% NJ Sales Tax + 5% NJ State Occupancy Fee); Ocean City's local 3% Municipal Occupancy Tax (effective 11/1/2025) currently applies to hotel/motel occupancies only and has not been extended to marketplace-booked transient accommodations on all bookings.
  7. Renew annually. Contact city for renewal fee details.

Frequently Asked Questions

Do you need a permit to run an Airbnb in Ocean City?
Yes. Operating a short-term rental — including an Airbnb or Vrbo — in Ocean City requires a Mercantile License (Rental Registration).
Does Ocean City require a short-term rental to be your primary residence?
No. Ocean City allows non-owner-occupied short-term rentals, so investment properties can qualify provided you hold the required permit.
How many days a year can you short-term rent in Ocean City?
Ocean City does not cap the number of nights per year you can short-term rent, though permitting, zoning, and occupancy rules still apply.
What taxes do you pay on a short-term rental in Ocean City?
Short-term rental stays in Ocean City are subject to a combined 11.625% in lodging taxes. This combines 6.625% New Jersey Sales Tax + 5% New Jersey State Occupancy Fee + 3% Ocean City Municipal Occupancy Tax (hotel/motel occupancies). The host is responsible for collecting and remitting them.
What happens if you run a short-term rental without a permit in Ocean City?
Operating without a permit can cost up to $500 fine and/or up to 90 days imprisonment per violation.

Official Sources

  1. Mercantile Licensing - Ocean City NJ - Services
  2. Chapter 5: General Licensing - Ocean City, NJ - eCode360
  3. Chapter 30: Municipal Fees - Ocean City, NJ - eCode360
  4. Hotel/Motel Occupancy Fee and Municipal Occupancy Tax - NJ Division of Taxation
  5. State Occupancy Fee - NJ Division of Taxation
  6. Taxes Imposed on the Rental of Transient Accommodations (TB-81R) - NJ Division of Taxation
  7. Municipal Occupancy Tax List - NJ Division of Taxation
  8. Municipal Code, Licensing and Fire Prevention - Ocean City, New Jersey