The 167-member group, which includes the owners of lodgings in Wildwood, Wildwood Crest and North Wildwood, announced yesterday that it is suing the state Division of Taxation to compel it to collect the proper taxes on condos and other facilities rented on a transient basis.

There are at least 100 such facilities in the Wildwoods, and thousands more statewide, where the units are rented by the building owner, the association charged. It is unclear whether individual Shore home rentals would be affected.

In its suit, filed in the Tax Court of New Jersey in Mercer County, the association contends that dozens of condominium buildings in the Wildwoods - many of them former motels - are being run as temporary lodging facilities and should collect the 12 percent sales and occupancy tax that the state requires motels and hotels in the resort to charge.

State statutes stipulate that any room rented on a "transient" basis is to be taxed, said Frank L. Corrado, a Wildwood lawyer who is representing the association.

A spokeswoman for the Division of Taxation declined to comment on the suit.

In 2003, the state imposed a 5 percent room occupancy tax over and above the sales tax, which was then 6 percent. The sales tax is now 7 percent.

In municipalities such as the Wildwoods, where a 2 percent hotel/motel tax was already in place, the state agreed to pocket only 3 percent of the new 5 percent occupancy tax. The other 2 percent of the tax collected here goes to fund the resort's advertising and marketing budget.

Because they do not collect any taxes, the association said in its suit, so-called "condotel" operators have an unfair advantage.

For a week in a room that costs $200 a night, a vacationer can save $168 in taxes by booking a condotel.

"In the last decade, a new trend has developed in the accommodations industry," the suit said. "Buildings organized under condominium form of ownership are being operated with rooms rented as motel units on a daily basis.

"The conversion of properties from traditional hotels to condotels has been hastened by the tax advantage conferred upon them by the state," the suit said.

The condo hotels have even begun to use the appearance of a discount - a 12 percent savings over traditional motel and hotels - in their marketing, said Bruce Smith, chairman of the Greater Wildwood Hotel & Motel Association.

"All we're looking for is a level playing field," said Smith, who owns the Tangiers Motel in Wildwood Crest.