Short-term rental rules · Sedona, Arizona
Short-term rentals in Sedona, explained properly.
Arizona state law bars Sedona from banning or capping short-term rentals outright, but the city requires an annual STR permit per unit, a TPT license, a 24/7 emergency contact, neighbor notification, insurance, and a background check, and bans hosting special events. State law caps how much cities can charge for the permit itself.
Draft. These rules were compiled from the official sources listed below but have not yet been checked line by line. Confirm with the city before making decisions.
At a glance
What you need to know before you buy or list
| Question | Answer |
|---|---|
| Are short-term rentals allowed? | Yes, citywide — Arizona state law (A.R.S. § 9-500.39) prohibits municipalities from banning short-term rentals outright[1]Confirming |
| Permit required? | Yes — an annual STR permit is required for every property offered as a short-term rental; each separately advertised unit (e.g., a main house plus a casita) needs its own permit[2] |
| State TPT license required | Property owners must obtain a Transaction Privilege Tax (TPT) License from the Arizona Department of Revenue before applying for a city permit, and must keep it current with each renewal[2] |
| Late renewal penalty | Effective January 1, 2026: a $50 fee if renewal is 2-90 days late, rising to a flat $100 if more than 90 days late[2] |
| Occupancy limit | Generally calculated as 2 guests per bedroom plus 2 additional (e.g., a 3-bedroom unit tops out around 8 guests), though actual limits can vary based on septic/sewer capacity[3]Confirming |
| Combined lodging tax (TPT) | Typically 12-14% combined, including 5.5% state TPT plus city and county taxes[3]Confirming |
| Special events prohibited | Short-term rentals cannot be used to host events that would otherwise require a special event permit — weddings, conferences, retreats, and similar organized gatherings are banned outright[2] |
| 24/7 emergency contact requirement | An emergency contact must be designated and available 24/7, responding within about 60 minutes of a complaint[3]Confirming |
| Liability insurance required | State law authorizes cities to require liability insurance up to a $500,000 minimum for short-term rental permits[1]Confirming |
| State cap on permit fees | Arizona state law caps how much a city can charge for an STR permit — fees are capped at the city's actual administrative cost or $250, whichever applies[1]Confirming |
| Last researched | September 25, 2026 |
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Detailed rules
The full picture, section by section
Eligibility & zoning
| ADUs restricted from STR use | Since September 2024, accessory dwelling units (ADUs) cannot be used as short-term rentals unless the property owner lives in the primary structure on the same lot[3]Confirming |
|---|---|
| State law bars a citywide permit cap | Because Arizona state law does not currently authorize cities of Sedona's size to cap the number of STR permits, there is no numeric ceiling on how many properties can be permitted citywide (a pending 2026 bill, SB 1076, would extend cap authority only to cities under 70,000 population)[1]Confirming |
Licensing & application
| Incomplete applications are denied outright | As of October 23, 2025, applications submitted with missing or invalid information are denied rather than held for correction, making it important to submit a complete application the first time[2] |
|---|---|
| Renewal process and timing | Renewals are handled online via a MUNIRevs account; renewal reminders go out 4-6 weeks before expiration, and the city recommends renewing 1-2 weeks before the deadline; most renewals are approved within 2-3 days, with up to 7 business days allowed[2] |
| Background check required | The city's own municipal code lists a background-check requirement as a distinct section of its STR ordinance, alongside insurance and neighbor-notification requirements[4]Confirming |
Operations & requirements
| Neighbor notification required | Before operating, the city's ordinance requires neighbor notification, and the code also requires posting notice on the property itself[4]Confirming |
|---|---|
| Quiet hours | Typical quiet hours run from 10 p.m. to 7 a.m., though the exact current ordinance language should be checked directly[3]Confirming |
| Parking requirement | Adequate off-street parking is required for guests[3]Confirming |
Taxes & fees
| TPT license renews annually | The Arizona TPT license renews yearly in December/January with the Arizona Department of Revenue, separately from the city's own STR permit renewal[2] |
|---|
Changes
Recent and pending changes
Arizona's state legislature has been actively adjusting how much authority cities have over short-term rentals — SB 1168 (2022) shifted the state from near-total preemption to allowing structured local enforcement (permits, insurance, emergency contacts, graduated penalties), and a further bill, SB 1076, was pending as of February 2026 that would let smaller cities (under 70,000 population) cap permit numbers and set spacing requirements. Sedona's own city code (Chapter 5.25) and vacation-rentals webpage should be watched for any changes made possible by future state legislation, as well as the city's own recent tightening (the October 2025 application-denial policy and the September 2024 ADU restriction).
Sources
Every rule above links to one of these
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This page is general information compiled from official sources, not legal or tax advice. HOA rules, deed restrictions and zoning for a specific property can be stricter. Confirm with the local permitting office and a qualified professional before buying or listing a property.