Vacation Rentals - Property Owner Responsibilities
Ensure the safety of the structure.
The building must be an approved structure. For example, if you wish to convert your garage, workshop or other accessory structure into a vacation rental, you must get the required building permits before you begin remodeling and conversion work.
- We strongly encourage you to install basic safety measures such as: fire extinguishers, smoke and carbon monoxide detectors, deadbolt locks, etc.
- Contact the Community Development Department at 928-282-1154 or go to the Permits page for details.
To use your property as a vacation rental you must acquire a business license whether or not the property for rent is a room or entire house and regardless of whether it is rented on a full-time or part-time basis.
- Go to the Business License page or contact the Finance Department at 928-204-7185.
- As part of the business license application, all vacation rental properties must provide the city with your emergency contact information. This information is used when situations arise that require your notification.
- Failure to Obtain a Business License (see below): per Sedona City Code §1.15.01, any violation of the City Code provisions, including Sedona City Code Chapter 5 is also a class 1 misdemeanor. Upon conviction thereof, violators may be punished by a fine not to exceed $2,500.00 or by imprisonment for a period not to exceed six months or by both a fine and imprisonment. Each day a violation continues is a separate criminal offense and is punishable as set forth herein.
A transaction privilege tax license from the Arizona Department of Revenue is required for all properties used for vacation rentals.
- Vacation rentals must remit sales tax and transient occupancy tax (bed tax) at the same rates as hotels. Check with the county in which your home is located to determine the sales tax rate because each county has different rates.
- These taxes must be paid regardless of whether or not you charge your guests tax in addition to the money they pay you for rent.
- As the property owner, it is your responsibility to collect the money and remit the taxes you collect to the Arizona Department of Revenue or ensure that a third party vendor does this on your behalf. Currently Airbnb is the only third party vendor the city is aware of that collects and remits taxes on behalf of its clients.
- Failure to make timely tax payments can result in fines and interest.
- For more information about business license requirements and sales tax remittance contact the city’s Finance Department at (928) 204-7185.
Compliance with city ordinances and regulations is important to protect property owners engaged in vacation rentals, their neighbors, and the safety and quality of Sedona’s neighborhoods.
- The city is in the process of creating an inventory of properties listed for vacation rentals to ensure compliance.
- Property owners engaged in vacation rentals that come into compliance with all applicable rules and regulations before October 31, 2017 will receive relief from any additional fines, penalties or interest related to noncompliance issues and code violations.
- Properties found to be in violation of any rules and regulations after October 31, 2017 will be subject to additional fines, fees and enforcement actions.
- Failure to obtain a business license to operate a vacation rental is a class 1 misdemeanor, with possible penalties of a $2,500 fine and six months imprisonment. Each day of a violation can be considered a separate criminal offense.
- If you will be improving your property, some improvements (that may not require a building permit) must also comply with the Land Development Code.
- Property owners are responsible for ensuring that renters are complying with all applicable rules and regulations such as noise, nuisances, etc.
Failure to Obtain a Business License
It is unlawful for any business to operate within the city limits without first having procured a current business license from the city and complying with any and all regulations of such business specified in the Sedona City Code, Sedona Land Development Code (SLDC) and Arizona Revised Statutes. -Sedona City Code §5.05.020
- Completion of an application and payment of fees are required to obtain a business license. -Sedona City Code §§5.05.020.G and 5.05.030
- Suspension, revocation or denial of a business license: A business license issued under this chapter may be suspended, revoked or deemed invalid at any time during the term of such license, or the application may be denied if the city or its designee determines that a person or entity owning or operating the business or an employee of the business has:
1. Failed to provide complete and accurate information on the applications required by this chapter; or
2. Failed to pay the business license fees in full when due and payable; or
3. Knowingly provided false information on the applications required by this chapter, including but not limited to providing a false or assumed name, or impersonating another establishment of a like or different name; or
4. Violated or is not in compliance with either Sedona City Code, SLDC, or the Arizona Revised Statutes; or
5. Refused to allow inspection of the business premises as authorized by this chapter; or
6. Been determined by the city to owe delinquent city transaction privilege taxes, or any other delinquent fees payable to the city pursuant to Sedona City Code or SLDC, unless the person or entity owning or operating the business has entered into a written payment agreement approved by the city relating to payment of any and all outstanding obligations and is current in making any and all payments required under the terms of such an agreement. -Sedona City Code §5.05.040.A
- Per Sedona City Code §1.15.01, any violation of the City Code provisions, including Sedona City Code Chapter 5, mentioned above, is also a class 1 misdemeanor. Upon conviction thereof, violators may be punished by a fine not to exceed $2,500.00 or by imprisonment for a period not to exceed six months or by both a fine and imprisonment. Each day a violation continues is a separate criminal offense and is punishable as set forth herein.