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Phoenix updates STR ordinance

  • Oct 10, 2023 | Jennifer Sokolowsky

Phoenix updates short-term rentals ordinance

Phoenix, Arizona, has tightened its rules for short-term rentals (STRs) with a new law approved by the City Council.

The measure updates Phoenix’s original STR ordinance, which was passed in 2020. The new rules go into effect on November 6 but won’t be enforced until January 15, 2024. Currently, 3,900 STRs are registered within Phoenix, but city officials believe the actual number of operating STRs is much higher.

Under the law, short-term rental operators must register with the city or face a fine of $1,000 per month. Operators are also required to:

  • Post their permit number on any advertisements
  • Provide proof their STR property is insured for at least $500,000
  • Respond to police calls within an hour
  • Inform neighborhood residents and associations that they intend to operate an STR

The city prohibits events such as parties and weddings in STRs.

Phoenix also recently approved a law allowing homeowners to build backyard casitas, but these can’t be used as STRs.

Law increases fines, requires marketplaces to verify listings

The city will be working with a third-party vendor to help identify unlicensed STRs. The law also requires STR marketplaces, such as Airbnb and Vrbo, to verify properties listed on their sites are following the rules.

The new law increases the amounts STR owners can be fined if they break the law. Violations can result in fines of up to $3,500, and the city can suspend an operator’s license if they have three verified minor violations or one serious violation within 12 months.

Local government regulation on the rise

Phoenix is joining other Arizona communities that have approved new STR rules following last year’s adoption of a state law giving local governments more STR regulation power.

The law allows cities and towns to regulate short-term rentals by:

  • Requiring permits or licenses
  • Requiring community notification of operations
  • Mandating liability insurance coverage
  • Fining owners or management companies when guests violate ordinances

These other Arizona governments have recently enacted STR legislation.

  • Coconino County approved an ordinance in August that will require STR hosts to register with the county and provide proof of insurance. Operators must designate an emergency contact who can respond to concerns within 72 hours.
  • Flagstaff passed a new law in July that goes into effect November 1, 2023. That measure requires STR owners to obtain a license and designate an emergency contact who can be available 24/7 to quickly respond to issues with the rental property.
  • Chandler’s new STR regulations went into effect August 1, 2023. Under the law, STR operators must obtain a license, display emergency contact information, and notify neighbors. STRs may not be used for nonresidential activities.
  • In Scottsdale, a new STR ordinance went into effect on January 8, 2023. That law requires STR operators to register with the city, carry a minimum amount of liability insurance, and notify neighbors that they’re running a short-term rental.

Stay compliant with Arizona STR laws

Arizona state law requires STR operators to have a state transaction privilege tax (TPT) license. The license number must be included in all ads.

STR hosts are also required to collect state transaction privilege tax and county excise tax 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 Arizona short-term rentals.

Avalara 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.

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.
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