Arizona Short-Term Rental Laws: What Phoenix & Scottsdale Hosts Need to Know

*Updated October 2026. Every rule below was checked against the official state and city sources linked in this article as of October 2026. Fees, tax rates and rules change, so confirm with the city before you list. This is general information, not legal or tax advice.*

Arizona's STR Regulatory Landscape: The Short Version

Arizona is more short-term rental friendly than most states. State law, A.R.S. § 9-500.39, says cities and towns may not prohibit vacation or short-term rentals. The original preemption law passed in 2016; a 2022 change gave cities the power to require a local short-term rental permit or license.

But "allowed to operate" and "compliant" are different things. Phoenix, Scottsdale, Sedona, Tempe, Mesa and Chandler all now require a city permit or license, on top of the state tax license and county registration every Arizona host needs. Getting this wrong means fines, a suspended permit, or a listing you cannot legally advertise.

Here is what you need to know, city by city. If you're still in the planning stage, pair this with our guide on how to start an Airbnb in Arizona. For more detail on a single city, see our local pages for Phoenix and Scottsdale.

What State Law Lets Cities Require

A.R.S. § 9-500.39 sets the outer limits of what an Arizona city can ask of a short-term rental owner. A city may require:

• A local permit or license. The application is limited to owner and contact information, the address, proof of Transaction Privilege Tax (TPT) compliance, an emergency contact and an acknowledgment. The fee is capped at the lesser of the city's actual cost or $250, and the city must issue or deny it within 7 business days.
• Neighbor notification before you operate.
• Your permit and TPT license numbers on every advertisement.
• $500,000 in liability coverage, either your own policy or equal coverage through the online lodging marketplace (such as Airbnb or Vrbo).
• Sex offender background checks on guests, waived when the booking platform performs them.

The statute also caps penalties. For verified violations, a city can fine up to $500, $1,000 and $3,500 for a first, second and third violation (or one, two and three nights' rent if greater), charge up to $1,000 per month if you fail to apply for a license within 30 days of a written notice, and suspend a permit for up to 12 months.

Accessory dwelling units: for an ADU with final approval after September 14, 2024, the statute lets a city require the owner to live on the property to rent it short-term.

Arizona State-Level Requirements

Before you look at city rules, two obligations apply to every Arizona STR host:

Transaction Privilege Tax (TPT) License

Every Arizona short-term rental needs a TPT license from the Arizona Department of Revenue (ADOR). You register at AZTaxes.gov. TPT is Arizona's tax on the rental, and short stays are taxed as transient lodging. Your TPT license number must appear on your advertising.

Platform collection: Online lodging marketplaces such as Airbnb and Vrbo collect and remit TPT on the bookings they facilitate. You still need the license, you still file returns (you deduct the platform-collected income using deduction code 775), and you are responsible for the tax on any direct bookings.

Short-term vs. long-term: Arizona made long-term residential rentals non-taxable from January 1, 2025. That change does not apply to short-term rentals or other transient lodging.

County Assessor Registration

All Arizona counties require residential rental properties to be registered with the County Assessor. In the Phoenix metro, that is the Maricopa County Assessor; several cities ask for proof of it in the permit application.

Phoenix STR Requirements

Phoenix began issuing short-term rental permits on November 6, 2023, through its Planning & Development Department. To operate in Phoenix you need:

1. A Phoenix STR permit — $250 per permit for the initial permit and each renewal, non-refundable
2. Your state TPT license from ADOR, and the home's rental status updated with the Maricopa County Assessor's Office
3. Neighbor notice by certified mail to the adjacent properties and those directly and diagonally across the street (or every unit on your floor in a multi-family building), plus any registered homeowners or neighborhood association whose boundaries fall within a 600-foot radius
4. A description or map of the home's safety equipment with the application
5. Your permit number on every advertisement

ADUs and casitas: from April 4, 2026, Phoenix requires the owner to live on the property when it has an ADU with a certificate of occupancy issued after September 14, 2024.

HOA note: state law limits what cities can do; it is not a rule about homeowners associations. If your property is in an HOA, read the CC&Rs before you list.

Official source: the City of Phoenix short-term rental registry. For help running a compliant listing in the city, see our Phoenix Airbnb management page.

Scottsdale STR Requirements

Scottsdale licenses every short-term and vacation rental of less than 30 days:

1. An annual city license for each property — $250 per year
2. A valid TPT license for each rental before you apply
3. Maricopa County registration first — the city states it is illegal to rent the home before it is registered with the county as a rental (A.R.S. § 33-1902)
4. At least $500,000 in liability coverage, through your own policy or the online lodging marketplace
5. Neighbor notice within 30 days of receiving the license (and again whenever the contact details change) to the adjacent single-family homes and those directly and diagonally across the street, or every unit on your floor. The notice includes your license number, the address and a 24-hour emergency contact, and a copy must be displayed on the inside of the front door

Taxes: Scottsdale rentals report the county transient lodging tax plus the city hotel and additional hotel taxes, and use deduction code 775 for income a platform already collected tax on (Scottsdale tax brochure).

Official source: City of Scottsdale information for owners and operators. Our Scottsdale Airbnb management page covers what compliant operation looks like locally.

Sedona STR Requirements

Sedona runs one of the more detailed short-term rental programs in Arizona. Inside city limits:

1. A city permit for every rental unit — an annual, non-refundable, non-transferable fee of $210 per unit, with your TPT license obtained first
2. $500,000 in aggregate liability insurance per unit and any required building safety approvals
3. Neighbor notice by certified mail (return receipt requested) or hand delivery to the adjacent properties and those directly and diagonally across the street, with your permit number and a 24-hour emergency contact
4. Your permit number on every advertisement and listing, plus a notice posted near the main entrance that locates the fire and life-safety equipment and states the noise and waste rules
5. No special events — weddings, receptions, retreats, workshops, trainings and conferences of any size are prohibited, and your listings must say so
6. A sex offender background check on the guest at least 24 hours before check-in, or evidence the booking platform ran it, kept for 12 months

Penalties run from $500 to $3,500, and a permit can be suspended for up to 12 months. The Village of Oak Creek is unincorporated Yavapai County, so the city permit does not apply there.

Official source: City of Sedona property owner responsibilities. See our Sedona Airbnb management page for more on operating there.

Tempe, Mesa & Chandler Requirements

All three cities require a city short-term rental license on top of your state TPT license:

• Tempe: a license for any rental of 29 days or less, one per unit, $250 per property ($187.50 if issued on or after July 1). You need $500,000 in liability coverage, neighbor notice after approval, and an emergency contact who responds within 30 minutes when public-safety personnel are dispatched and within 24 hours for non-emergency complaints. The City of Tempe lists a combined 14.07% lodging tax. See our Tempe page.
• Mesa: a license for any unit rented 29 days or less, $250, renewed every year, with proof of your TPT license, at least $500,000 in liability insurance and neighbor notice. The City of Mesa lists a combined 14.27% lodging tax. See our Mesa page.
• Chandler: a city license for each location, expiring June 30 each year, plus Maricopa County rental registration, neighbor notice, emergency-contact and prohibited-use information posted inside the unit, and both license numbers in every advertisement. The City of Chandler lists a combined 11.67% lodging tax. See our Chandler Airbnb investment page.

What Happens If You Don't Comply?

Operating without the proper permits creates several risks:

• City fines: state law lets cities fine up to $500, $1,000 and $3,500 for verified violations (or one, two and three nights' rent if greater), plus up to $1,000 per month if you don't apply for a license within 30 days of a written notice
• Suspension: a permit can be suspended for up to 12 months
• Advertising problems: cities can require your permit and TPT numbers on every listing, so an unpermitted listing is out of compliance the moment it goes live
• Liability exposure: if a guest is injured and you're operating without required permits or coverage, your insurance may not cover the claim
• HOA action: if you're violating CC&Rs, your HOA can enforce them separately from the city

The compliance cost (permits, licenses, time) is far lower than the risk of non-compliance.

STR Insurance: Don't Skip This

Standard homeowner's insurance policies typically don't cover short-term rental activity. Arizona law lets cities require $500,000 in liability coverage, and Scottsdale, Sedona, Tempe and Mesa do. You can meet it with your own policy or with equal coverage through the online lodging marketplace the stay is booked on.

Platform protection programs such as Airbnb's AirCover have their own limits, conditions and exclusions, and they only apply to stays booked through that platform. Many owners also carry a dedicated short-term rental policy that covers both property damage and liability, including for direct bookings. Check what your city accepts as proof before you apply.

Quick Compliance Checklist

Before your first guest checks in:

• State TPT license obtained from ADOR (AZTaxes.gov)
• Home registered as a rental with the County Assessor
• City STR permit or license obtained and active
• Permit and TPT license numbers added to all platform listings
• Neighbor notice sent the way your city requires
• Emergency contact designated and shared as your city requires
• Liability coverage of at least $500,000 in place (own policy or platform)
• Plan to file TPT returns, including tax on any direct bookings
• HOA CC&Rs reviewed (if applicable)
• Guest copy of house rules (noise, occupancy, parking) provided at booking

Stay Current — Regulations Change

Arizona STR rules keep evolving. Phoenix began issuing permits in November 2023 and added its ADU owner-residency rule in April 2026; Tempe's license took effect in March 2023 and Mesa's in February 2023. Check your city's short-term rental page at every renewal.

If you'd like help navigating compliance for a specific property or market, reach out here — our full-service management works with hosts across Arizona and keeps current on local requirements.