Boarding House Tax Prompted By Resident

The Township of Parsippany-Troy Hills may be adjusting an ordinance to include taxation on boarding homes after a resident brought a number of untaxed homes to the attention of the Township Council.

Roy Messmer, a resident of Morris Plains, met with Township Attorney John Inglesino after discovering that the municipality was not cashing in on a 3 percent tax on boarding home rooms.

“I want to commend Mr. Messmer and thank him for his thoughtfulness in bringing this to our attention,” said Inglesino during a public meeting on Tuesday, July 9.

In August 2003, Parsippany enacted a 3 percent hotel tax but did not apply it to boarding homes, which is allowed under state law.

“Boarding homes are included in the definition of hotels under the state law but the key is you have to stay for under 90 days,” said Inglesino. “If you stay in a boarding home for over 90 days then the home would not be eligible to be taxed.

If the tax is not paid, the town can put a lien on a property but would not have the power to foreclose, he said.

The current ordinance requires that all owners of rental properties register with the local division of housing, but does not specify that boarding homes have to register. The ordinance would have to be expanded or strengthened to include boarding homes with a penalty for properties who do not register, said Inglesino.

The council discussed the challenges of implementing the tax including how they will identify the boarding homes, where they are, how to enforce the payment and collection of tax, whether they have the staffing to enforce it and whether  there are enough homes to make it worth the effort.

Messmer said he has received numerous phone calls from residents identifying boarding homes in their neighborhoods.

“People are going to have to come up and drop a dime to town hall and say where the boarding houses are,” he said. "I'm looking to improve the quality of life because if we start going after these people that have the boarding homes they may say its not worth it."

Councilman Michael DePierro raised the concern that if these boarding homes are in residential, single-family neighborhoods they would not be legitimate boarding homes.

“How many areas in town do we have that the zoning allows for boarding houses? It can't be many,” he said. “Most of these have to be illegitimate and we should be following up on this to stop the boarding house situation.”

Inglesino and the Council will need to look into the ordinance to find out whether or not he boarding homes are allowed in the single-family residential zones before the tax can move forward, they said.

"If we are not able to enforce the boarding house law, let's pick up the revenue," said Messmer. "What I laid out, its about $100,000 conservatively and that's just based on 100 homes."