Local Arizona governments will have more leeway to regulate short-term rentals under new law
- Aug 2, 2022 | Jennifer Sokolowsky
A new Arizona law allows cities and towns more control over short-term rentals, allowing them to govern short-term rentals “via licenses or permits, notifications and liability insurance, as well as the ability to fine owners or management companies when their property occupants violate community ordinances," according to the office of Governor Doug Ducey.
Under the law, municipalities can require short-term rental operators to obtain licenses and provide the city information including the address of the rental, contact information for the owner or their agent, proof of transaction privilege tax (TPT) license, and an agreement to comply with applicable laws. Municipalities can also require that vacation rental hosts give neighbors contact information in case of complaints.
When the measure goes into effect September 24, local law enforcement will be authorized to impose fines of up to $500 or one night’s rent, whichever is greater, for first-time verified violations.
Subsequent violations can result in fines of the greater of $1,000 or $3,500, or two and three nights’ rent, respectively. Short-term rental operators that have three violations within 12 months may face a state Department of Revenue hearing that could lead to a yearlong suspension.
If a short-term rental violation involves a felony offense, wrongful death, or if a host willfully houses a sex offender, local governments may suspend that property’s license for a single violation.
“This new legislation will empower municipalities to enforce commonsense rules that will help create a safe and peaceful environment for all who live, vacation and do business within our state,” said State Senator J.D. Mesnard, co-sponsor of the bill along with Representative Steve Kaiser.
Scottsdale, which pushed for the legal change, plans to have its own new vacation rental ordinance in place by the time the state law goes into effect in September.
In 2017, Arizona passed a law that prohibited cities, towns, and counties from restricting short-term rentals, but the state has gradually given local governments some more say in regulating the industry.
A 2019 law required short-term rental operators to hold a TPT license and include that license number in all ads. It also banned short-term rentals from hosting special events that would normally require a permit, such as large parties. Under that law, municipalities were also allowed to require short-term rental owners to provide contact information for someone who could respond to complaints in a timely manner.
Arizona short-term rental operators are required to collect state transaction privilege tax, county excise tax, and local transient occupancy from their guests and remit it to tax authorities. The state requires all short-term rental online marketplaces, such as Airbnb and Vrbo, to collect and remit state and local taxes on behalf of their listings.
MyLodgeTax can help short-term rental operators comply with Arizona lodging tax registration, collection, and filing requirements. For more on Arizona lodging taxes, see our state Vacation Rental Tax Guide.
