STR Laws by State · Updated July 22, 2026
Arizona Short-Term Rental Laws: State Preemption Explained (2026)
Arizona is the near-opposite of Texas. Where Texas has no law stopping its cities from banning short-term rentals, Arizona has one of the strongest STR preemption statutes in the country: a city or town in Arizona “may not prohibit” vacation rentals or short-term rentals (A.R.S. § 9-500.39), and counties are barred the same way (§ 11-269.17). That rule dates to SB 1350 in 2016—often called “the Airbnb bill.” But the preemption is not what it was: the Legislature has walked it back twice, in 2019 and again with SB 1168 in 2022, handing cities real regulatory teeth. This page explains what the preemption still forbids, what your city can now require after 2022, and how Arizona’s state transient lodging (TPT) tax works.
| Statewide STR ban? | No — state law bars cities, towns, and counties from banning short-term rentals |
|---|---|
| Statewide license/permit? | No state permit — but nearly every Arizona city now requires a local permit/license, with the application fee capped at $250 by state law |
| State preemption of local STR rules? | Yes — strong. Unlike Texas, Arizona flatly preempts local bans. Cities “may not prohibit” STRs (A.R.S. §§ 9-500.39, 11-269.17) |
| Governing framework | A.R.S. § 9-500.39 (cities/towns) & § 11-269.17 (counties) — created by SB 1350 (2016), amended by HB 2672 (2019) and SB 1168 (2022) |
| Owner-occupancy required statewide? | No — preemption bars cities from imposing an owner-occupancy or primary-residence mandate; investor whole-home rentals are allowed |
| State transient lodging tax (TPT) | 5.5% state transaction privilege tax, transient lodging classification (A.R.S. § 42-5070), on stays under 30 days |
| Local transient lodging tax | County excise + city transient/bed tax stack on top — combined rates commonly land around 12–14%+ depending on the city |
| Last verified | 2026-07-22 |
This page is a plain-language summary of public Arizona law, not legal advice. State statutes, city ordinances, and tax rates change — confirm the current rules with the Arizona Department of Revenue and your city before operating.
Is short-term rental legal in Arizona?
Yes—and here the state, not the city, gives you the baseline answer. Arizona law expressly forbids its cities, towns, and counties from banning short-term rentals. Under A.R.S. § 9-500.39, “a city or town may not prohibit vacation rentals or short-term rentals” and may not restrict them based on their classification, use, or occupancy except as the statute allows. A.R.S. § 11-269.17 imposes the identical limit on counties in unincorporated areas. So no Arizona jurisdiction can zone STRs out of existence or require that you live in the home.
That does not mean anything goes. Since 2022, cities can require you to hold a local permit, carry insurance, name a 24/7 emergency contact, and run sex-offender background checks—and they can fine you and suspend your permit if you don’t. The legal picture is: the state guarantees you can operate; your city decides the paperwork and the penalties. That is the inverse of a no-preemption state like Texas, where the city decides whether you can operate at all.
The Arizona preemption law: cities cannot ban STRs
Arizona’s STR rules live in two mirror-image statutes: A.R.S. § 9-500.39 for cities and towns, and A.R.S. § 11-269.17 for counties. Both carry the same title—“Limits on regulation of vacation rentals and short-term rentals; state preemption; civil penalties; transaction privilege tax license suspension; definitions”—and both open with the same command: local government may not prohibit STRs.
SB 1350 (2016): the original “no ban” rule
The preemption was created by Senate Bill 1350, signed by Governor Doug Ducey in May 2016 and effective January 1, 2017. Sponsored by then-Senator Debbie Lesko and pushed by the Goldwater Institute, it was the first law of its kind in the nation and was widely nicknamed “the Airbnb bill.” As enacted, SB 1350 was sweeping: cities could regulate STRs only for genuine health-and-safety reasons (fire and building codes, sanitation, traffic, waste) and could not require permits, licenses, or owner-occupancy. For a few years, Arizona was the most STR-permissive state in the country—by design.
How the preemption was walked back
Complaints about “party houses” and absentee investors pushed the Legislature to hand power back to cities—twice. The preemption today is a much narrower thing than the 2016 version:
- HB 2672 (2019) — the first crack. It let cities fine operators for verified violations of local or state law, require an emergency contact who responds in person, require $500,000 in liability insurance (or platform-provided equivalent coverage), and prohibit using an STR to house sex offenders, run a sober-living home, sell illegal drugs, or operate an adult-oriented business.
- SB 1168 (2022) — the big walk-back. Signed by Governor Ducey on July 6, 2022 and effective September 24, 2022, it authorized cities and towns to require a local regulatory permit or license (with the application fee capped at $250), demand proof of insurance, require neighbor notification, mandate sex-offender background checks on guests, and—critically—suspend a permit for up to 12 months for repeated verified violations. It also set an escalating civil-penalty schedule (below).
What did not change through either amendment: the core preemption. A city still cannot ban short-term rentals, cannot require owner-occupancy, and cannot zone them out. The Legislature restored cities’ ability to regulate and punish, not their ability to prohibit. Reform bills to tighten the screws further keep being filed (as recently as the 2026 session), but as of mid-2026 the framework above is the law.
What Arizona cities can and can’t do after 2022
Post-SB 1168, the line between permissible regulation and an illegal ban is sharp. Here is where it falls.
| A city/county MAY (post-2022) | A city/county may NOT |
|---|---|
| Require a local STR permit/license (application fee capped at $250) | Ban or prohibit short-term rentals outright |
| Require a designated 24/7 emergency contact | Require the owner to live in the property (owner-occupancy / primary-residence mandate) |
| Require $500,000 liability insurance (or platform equivalent) | Zone STRs out of residential areas, or cap their number to a de facto ban |
| Require sex-offender background checks on guests (waived if the platform performs one) | Regulate based on the property’s STR classification, use, or occupancy beyond what the statute allows |
| Require neighbor notification before operating | Charge a permit application fee above $250 |
| Levy escalating civil penalties and suspend the permit up to 12 months for repeat violations | Impose non-safety regulation that doesn’t fit an enumerated category |
The civil-penalty ladder
SB 1168 set a capped, escalating penalty schedule for verified violations of a city’s STR ordinance. Per A.R.S. § 9-500.39, the maximums are the greater of a dollar figure or a number of nights’ rent:
- First violation: up to the greater of $500 or one night’s rent.
- Second violation (within 12 months): up to the greater of $1,000 or two nights’ rent.
- Third and later violations (within 12 months): up to the greater of $3,500 or three nights’ rent—and the city may suspend the permit for up to a year.
Separately, a city may impose a civil penalty of up to $1,000 per 30 days for failing to keep a valid emergency contact on file, after giving 30 days’ notice. This is why cities like Scottsdale attach real fines to their programs while still being unable to ban the rentals—the enforcement teeth are in the permit, not in a prohibition.
Arizona short-term rental taxes (TPT)
Unlike California (which has no state lodging tax), Arizona does tax short-term stays at the state level—through the transaction privilege tax (TPT), Arizona’s version of a sales tax, under the transient lodging classification.
The state transient lodging TPT
Renting lodging to a transient—defined by A.R.S. § 42-5070 as a guest who stays fewer than 30 consecutive days—falls under the transient lodging classification of the TPT. The state rate on that class is 5.5%. Because the classification turns on the sub-30-day stay, it maps almost exactly onto what makes a property an Airbnb or Vrbo in the first place; a stay of 30 days or longer drops out of the transient class.
County and city taxes on top
The 5.5% state rate is only the first layer. Arizona counties add a transient-lodging excise, and cities add their own transient/bed tax under the Model City Tax Code. Stack them and a guest in a major Arizona market commonly pays somewhere around 12–14%+ in combined transient tax—in Scottsdale, for example, the state + Maricopa County + city transient-lodging layers combine to roughly 14%. Rates vary widely by jurisdiction, so confirm your city’s current combined rate rather than assuming a single statewide number.
Who actually collects it
Arizona requires online lodging marketplaces—Airbnb and Vrbo—to register with the Arizona Department of Revenue and collect and remit the TPT (state and local layers) on the bookings they process. That is a meaningful convenience: for platform bookings, much of the tax is handled for you. But if you take direct bookings, or a platform doesn’t cover a particular local tax, you are responsible for holding a TPT license and remitting yourself. Every Arizona STR operator should hold an Arizona TPT license regardless.
| Tax | Rate | Authority / notes |
|---|---|---|
| State TPT — transient lodging | 5.5% | A.R.S. § 42-5070; applies to stays under 30 days; platforms generally collect this |
| County transient-lodging excise | Varies (often ~0.3–6%) | Set by county; e.g., Maricopa County adds a transient-lodging layer |
| City transient / bed tax | Varies (commonly ~1.5–6%) | Model City Tax Code; e.g., Scottsdale, Phoenix, Sedona each set their own |
| Combined (typical major market) | ~12–14%+ | Confirm the exact stack with your city and ADOR |
How the big Arizona markets differ
Because no Arizona city can ban STRs, the markets differ not in whether you can operate but in the permit, the fee, and the enforcement—all under the statewide $250 fee cap.
| City | Local permit? | Annual fee | Notes |
|---|---|---|---|
| Scottsdale | Yes — STR license (Ord. 4566) | $250 | Guest sex-offender check required; $1,000 + $1,000/mo penalties for operating unlicensed |
| Phoenix | Yes — STR registry/permit | $250 | Emergency contact, neighbor notice, and guest background-check requirements |
| Sedona | Yes — STR permit | ~$210/unit | Guest sex-offender checks 24 hours before check-in; records kept 12 months |
| Flagstaff | Yes — STR permit | ~$180 | Registration and safety requirements; fee rises modestly each year |
| Tucson | Yes — STR permit | $25 + $45 renewal | Among the lowest fees in the state (the $250 figure is a cap, not a floor) |
Scottsdale runs the most-cited program: a $250/year license under Ordinance 4566 (adopted October 2022 under the new SB 1168 authority), a required Arizona TPT license, a 24/7 emergency contact, and a sex-offender background check before each stay—with a $1,000 fine plus $1,000/month for operating unlicensed. See our full Scottsdale STR license guide for the details. The other cities followed the same template SB 1168 made available, differing mainly in fee and paperwork. One practical trap the state can’t fix: HOA and CC&R restrictions. Preemption binds governments, not private covenants—many Arizona subdivisions privately prohibit STRs, and that ban is enforceable even though the city’s is not.
Pending and changing rules
Arizona’s balance keeps getting renegotiated. Cities and neighborhood groups continue to press the Legislature for more control—occupancy caps, tighter suspension triggers, and per-property limits have all been proposed, including in the 2026 session—while the STR industry defends the core “no ban” preemption. Any of these could shift what your city may require. The two statutes on this page (§ 9-500.39 and § 11-269.17) are also periodically renumbered and amended, so treat the specific fee caps and penalty figures as current-as-of the verified date below and confirm before relying on them.
Sources & verification
Every rule above is drawn from Arizona statutes, the Legislature’s bill records, and the Department of Revenue. Verified 2026-07-22:
- A.R.S. § 9-500.39 — cities/towns preemption: “may not prohibit” STRs; enumerated permitted regulation (permit/license with $250 fee cap, insurance, emergency contact, neighbor notification); escalating civil penalties.
- A.R.S. § 11-269.17 — the counties’ mirror statute (same preemption and permitted-regulation framework for unincorporated areas).
- A.R.S. § 42-5070 — transient lodging classification; defines “transient” as a stay under 30 consecutive days.
- SB 1350 (2016, 52nd Legislature) — the original preemption (“the Airbnb bill”), effective Jan. 1, 2017.
- SB 1168 (2022, 55th Legislature) — House bill summary — restored city authority: permits/licenses, $500,000 insurance, emergency-contact penalties, neighbor notification, escalating civil penalties, permit suspension up to 12 months.
- Scottsdale Revised Code, Art. IX (Vacation Rentals & Short-Term Rentals) — Ordinance 4566 licensing, fees, and background-check duties.
- City of Phoenix — Short-Term Rental Registry — Phoenix permit, emergency-contact, and guest background-check requirements.
- Arizona Department of Revenue — Short-Term Lodging (TPT): the 5.5% state transient-lodging rate and online-lodging-marketplace collection. (This azdor.gov page is live but blocks automated requests; view it in a browser.)
Regulations change — verify with the Arizona Department of Revenue and your local city government before operating.
Compare short-term rental rules in Arizona & other states
- Short-term rental laws by city (lookup hub)
- Florida state overview — partial preemption with a June 1, 2011 grandfather line that lets pre-2011 cities like Miami Beach still ban STRs.
- Scottsdale, AZ — the $250 license, Ordinance 4566 duties, and enforcement penalties under Arizona’s preemption.
- Texas state overview — the mirror image: a state with no preemption, where cities fight STR bans out in court.
- Tennessee state overview and California state overview — a state STR-protection statute and a coastal-zone overlay, two other ways states shape local STR rules.
Frequently asked questions
Can an Arizona city ban short-term rentals?
No. Under A.R.S. § 9-500.39 (cities/towns) and § 11-269.17 (counties), Arizona local governments “may not prohibit” short-term rentals. They can require a permit, insurance, an emergency contact, and background checks, and they can fine you and suspend your permit—but they cannot ban STRs or require you to live in the property.
Do I need a license to run an Airbnb in Arizona?
There is no statewide STR license, but since SB 1168 (2022) nearly every Arizona city requires a local permit or registration, with the application fee capped at $250. You also need an Arizona TPT license to remit transient lodging tax. Check your specific city—Scottsdale, Phoenix, Sedona, Flagstaff, and Tucson all have programs.
What is SB 1350, and is it still in effect?
SB 1350 (2016) is the law that first barred Arizona cities from banning short-term rentals, effective January 1, 2017. Its core “no ban” preemption is still in effect (now in A.R.S. § 9-500.39), but two later laws—HB 2672 (2019) and SB 1168 (2022)—walked back the rest of it, restoring cities’ power to require permits, insurance, and background checks and to impose fines and permit suspensions.
How much tax do I pay on an Arizona short-term rental?
The state transaction privilege tax on transient lodging is 5.5% (A.R.S. § 42-5070) for stays under 30 days. Counties and cities add their own transient-lodging taxes on top, so the combined rate in a major market commonly lands around 12–14% or more. Airbnb and Vrbo generally collect and remit both the state and local layers on bookings they process.
Can my HOA still stop me from running an STR in Arizona?
Yes. State preemption binds governments, not private agreements. If your HOA’s CC&Rs prohibit short-term rentals, that private restriction is enforceable even though your city cannot ban them. Always check your HOA declarations before buying an Arizona property to rent.
Last verified: 2026-07-22. Rules change — confirm current requirements with the Arizona Department of Revenue and your local city government before operating.