Chandler, Arizona, creates new rules for short-term rentals, including taxation
- Sep 29, 2020 | Jennifer Sokolowsky
The city of Chandler, Arizona, has changed the city code in order to have more oversight of short-term rentals and subject them to city taxes.
The changes require vacation rental hosts to apply for a city transaction privilege tax (TPT) license and register contact information with the city. Owners and managers must arrive on-site within an hour if called by police or code enforcers. The change also bars short-term rentals from nonresidential uses, such as events.
Out of approximately 591 vacation rentals listed on Airbnb and Vrbo in June, only about 100 were licensed, according to the city. Vacation rentals generated around $150,000 in tax revenue for the city between 2018 and 2020.
The change in Chandler came after state House Bill 2672 went into effect last year offering local governments more say in how they could deal with disruptive short-term rentals. The bill amended legislation that went into effect in 2017 prohibiting cities, towns, and counties from restricting short-term rentals.
Advocates lobbying for the bill complained that proliferating short-term rentals were becoming nuisances with loud parties and other unneighborly behavior. In June of last year, one person was shot and killed at an Airbnb house party in Chandler. Last month, Airbnb announced a global ban on house parties at all of its properties.
The state measure allowed municipalities to require short-term rental owners to provide contact information for someone who can respond to complaints about the short-term rental in a timely manner. Governments can also prohibit short-term rentals from hosting special events that would normally require a permit, such as large parties.
Under the law, the Department of Revenue is also authorized to impose fines ranging from $500 to $1,500 on any short-term rental hosts who receive citations from a city or county for violating vacation-rental use laws.
The state law requires short-term rental operators to hold a current state TPT license. That license number must be included in all ads. Hosts who break these rules face fines of $250 for a first offense and $1,000 for a second.
Arizona short-term rental operators are required to collect state transaction privilege tax and county excise tax from their guests and remit it to tax authorities. Now hosts in Chandler will be required to register for a city TPT license as well, add the tax to their guests’ bills, and file regular TPT returns with the city.
The state requires all short-term rental online marketplaces, such as Airbnb and Vrbo, to collect and remit state and local taxes on Arizona short-term rentals. Previously, Airbnb was the only online marketplace that collected taxes on short-term rentals booked through its platform, as a result of a voluntary agreement reached with the state in 2017.
MyLodgeTax can help short-term rental operators in Arizona comply with state and local tax registration, collection, and filing requirements. For more on Arizona lodging taxes, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.