What is a short-term vacation rental?
A short-term vacation rental refers to the rental of part or all of any legally permitted dwelling unit for fewer than 30 consecutive days.
What is the legal definition of a short-term vacation rental?
"Vacation rental" or "short-term rental" means any individually or collectively owned single-family or one-to-four-family house or dwelling unit or any unit or group of units in a condominium, cooperative or timeshare, that is also a transient public lodging establishment or owner-occupied residential home offered for transient use if the accommodations are not classified for property taxation under section 42-12001. Vacation rental and short-term rental do not include a unit that is used for any nonresidential use, including retail, restaurant, banquet space, event center or another similar use. - A.R.S. §9-500.39
What can be used as a vacation rental?
• Single-family houses
• 1 to 4 unit houses (duplexes, etc.)
• Condominiums, townhouses, cooperatives or timeshares
• Individual rooms within any of above
• Guest houses, casitas, mother-in-law quarters
What cannot be used as a vacation rental?
• The use of structures not approved as a dwelling unit; unsafe structures (garage, shed, etc.) that do not meet health and safety standards
• Apartment complexes of 5 or more units
Property Owner Questions
Can I use my property as a vacation rental?
• You will need to determine the zoning of the property and if it is an approved structure. Call Community Development (928-282-1154) for assistance.
• If there is a homeowners association (HOA), check the HOA rules to determine if short-term rentals are permitted. The city does not enforce HOA rules.
What do I need to do if I want to start renting my property as a vacation rental?
- Contact Community Development (928-282-1154, 102 Roadrunner Dr.)
Staff can assist with determining the zoning, need for building permits, and compliance with city codes, etc.
Contact the State of Arizona Department of Revenue (aztaxes.gov)
You will need a Transaction Privilege License from the State of Arizona.
Do I need to pay sales tax on vacation rentals?
Yes, you will need to collect state/county and city taxes. Vacation rentals are required to remit transaction privilege tax at the same rate as a hotel (transient occupancy tax).
How do I get a Transaction Privilege Tax License?
Go to the Arizona Department of Revenue
What is the tax rate for vacation rentals?
Rates vary depending on which county the property is located in.
Yavapai County: 6.35% + 3.5% bed tax + 3% hotel tax to City of Sedona = 12.85%
Coconino County: 6.9% + 3.5% bed tax + 3% hotel tax to City of Sedona = 13.40%
Contact the Finance Department: 928-204-7185
If I only rent my home out a few days or weeks a year, do I still need a transaction privilege tax license and to pay taxes?
I am only renting out a room in my house, do I still need a transaction privilege tax license, and to pay taxes?
What if I have a complaint or concern about a vacation rental in my neighborhood?
Contact Community Development during business hours (Monday – Thursday, 7 a.m. – 6 p.m.): 928-282-1154, 102 Roadrunner Dr.
After normal business hours, contact the Sedona Police Department at (928) 282-3100.
In an emergency dial 911.
What do I do if my neighbor’s guests are parking in front of my house?
If vehicles are obstructing traffic, contact the Sedona Police Department at (928) 282-3100.
Can a home be used as a vacation rental if there is a homeowners association (HOA)?
If the HOA rules allow for rentals of less than 30 days – check the HOA rules. The city does not enforce or have copies of HOA rules.