Short-term rentals in Surprise, explained properly.

26-258(b) provides that every application, including a renewal application, must be accompanied by a non-refundable fee established by city council resolution. The council resolution or City fee schedule that sets the amount, and its effective date, were not available to read, so no amount is shown here.

26-258(a) requires a signed application containing at minimum: the physical address of the property; the owner's name, address, email and telephone (for an entity, its legal name, statutory agent and state of incorporation); the owner's designee, if any; the name, address, email and 24-hour telephone number of the emergency point of contact; proof of a valid transaction privilege tax license; proof of insurance under 26-264; a statement that the owner will comply with all applicable laws and that the owner and each authorized representative is not a registered sex offender and has not been convicted of a felony that resulted in death or serious physical injury or of a felony involving use of a deadly weapon within the past five years; and an attestation that the neighbor notification under 26-263 was completed. The application is a public record.

26-258(f): all licenses are valid for one year from the date of issuance until and unless suspended or revoked, and the owner or authorized representative applies for renewal and pays a renewal license fee annually. The license is non-transferable and non-assignable.

26-258(c): the City will issue or deny the license within seven city business days after receipt of a complete application, except that it may deny for these reasons: the applicant failed to provide required application information, failed to pay the license fee, or gave false or misleading information; the owner or authorized representative is a registered sex offender, has been convicted of a felony that resulted in death or serious physical injury, or has been convicted of a felony involving use of a deadly weapon within five years of applying; or, at the time of application, the owner has a suspended license for the same rental. The City gives written notice of a denial that tells the applicant of the right to appeal under Section 26-37 (26-258(d)).

26-259: when requested by a police officer, the emergency point of contact named on the license application must be on the premises, or available by phone or text, within 60 minutes of a request related to an emergency that requires police response. The owner, authorized representative or emergency point of contact must respond to all other non-emergency complaints in person, by phone, email or text within 24 hours of the request. The contact's name, address, email and 24-hour telephone number are part of the application (26-258(a)(4)).

26-263: before offering a rental for the first time, the owner or authorized representative gives written notice, in the form required by the City, to each single-family residential property adjacent to, directly across from, and diagonally across the street from the rental. The notice includes the City license number, the physical address of the rental, and the name, physical address, email and 24-hour telephone number of the emergency point of contact. An additional notice is required before any change in the emergency point of contact on file with the City. The applicant attests to completing the notification (26-258(a)(8)).

26-264: before advertising a rental or renting it, the owner must provide evidence of at least $500,000.00 aggregate general liability insurance for each short-term rental, either by contracting for the insurance directly or by advertising through an online lodging marketplace that provides equal or greater coverage. Proof of insurance is part of the license application (26-258(a)(6)).

26-261: the owner or authorized representative displays the City short-term or vacation rental license number on each advertisement placed in any media or online platform, prominently at the top of the advertisement in bold-face type in a point size no smaller than the smallest point size elsewhere in the advertisement.

26-262: the owner or authorized representative displays inside the property, in a conspicuous place within ten feet of the primary entrance, a notice with the name, phone number and email address of the owner, authorized representative and emergency point of contact. The notice must also carry the City license number and the code's required wording listing the unlawful uses (nonresidential uses, special events that otherwise require a permit or license, retail business, restaurant, event center, banquet hall, adult-oriented business or prostitution, housing sex offenders, operating a sober living home, and other uses prohibited by A.R.S. § 9-500.39.B).

26-260(a) requires every rental to comply with all applicable federal, state and local laws, rules and regulations, including sanitation, solid waste, tax privilege licensing, property tax registration, traffic control, pollution and noise control, property maintenance and nuisance abatement. 26-260(d) makes it unlawful to offer for rent or operate a rental without a valid transaction privilege tax license issued by the State of Arizona. The article's remedies are in addition to other City of Surprise codes (26-255).

26-267 allows these civil penalties against the owner who causes, allows, facilitates, aids or abets a verified violation of the article at the same rental within a 12-month period: up to $500.00 or up to one night's advertised rent, whichever is greater, for the first violation; up to $1,000.00 or two nights' rent, whichever is greater, for the second; and up to $3,500.00 or three nights' rent, whichever is greater, for a third and any later violation. Multiple violations arising from the same response to an incident count as one. The remedies are cumulative and are in addition to any other penalty under the Surprise Municipal Code. A verified violation is a final adjudication of guilt or civil responsibility, which may include a hearing officer's final decision (26-256).

26-258(e): failing to apply for a license is a civil offense punishable by a fine of $1,000.00 per month if the owner or authorized representative fails to apply within 30 days after receiving written notice of the failure to comply. The fine may be assessed for every 30-day period the owner fails to apply for or maintain a valid license, measured from the date the written notice was received. 26-257(c) adds that the owner must immediately cease operating until a valid license is obtained. Separately, failing to give emergency point of contact information on the application is a civil offense of $1,000.00 against the owner for every 30 days, after 30 days' written notice from the City before the first penalty (26-258(a)(4)).

26-266(a): the City may suspend a license for up to 12 months for three verified violations of the article within a 12-month period (not counting an aesthetic, solid waste disposal or vehicle parking violation that is not also a serious threat to public health and safety), or for one verified violation that results in or constitutes a felony committed at or near the rental by the owner or authorized representative; a serious physical injury or wrongful death resulting from their knowing, intentional or reckless conduct; knowingly or intentionally housing a sex offender, allowing adult-oriented business, sexual or prostitution offenses, or operating a sober living home; or knowingly or intentionally allowing a special event that would otherwise need a permit or license, or a retail, restaurant, banquet or similar use. The City gives written notice of the suspension to the owner and authorized representative, with the right to appeal under Section 26-37; an appeal does not operate as a stay of the suspension (26-266(b)).

Applies to: Subject to change if state law is amended

A.R.S. § 9-500.39(A) bars Arizona cities and towns from prohibiting short-term rentals, and subsection (B) lists the only ways they may regulate them (health and safety rules, zoning and nuisance rules applied like other residential property, emergency contact, a local permit, neighbor notice, permit number in ads, insurance, and owner residency on some properties with an accessory dwelling unit). Permit caps and minimum-distance or spacing limits are not on that list, and the statute applies to cities of every size.

Short-term rental income (stays under 30 days) is subject to Arizona transaction privilege tax (TPT), so hosts need a TPT license from the Arizona Department of Revenue (a seasonal license can be chosen on AZTaxes.gov) and must include the TPT license number in any advertising for the rental. A city business license, where a city requires one, is separate from the TPT license.

Arizona's state transaction privilege tax rate on the transient lodging classification (A.R.S. § 42-5070) is 5.5%, set by A.R.S. § 42-5010(A)(2). County and city taxes are added on top and vary by location.

Hosts must file a TPT return for every period even if the property was not rented, filing a $0 return rather than skipping the filing.

Separately from tax licensing, every Arizona county requires residential rental properties to be registered with the County Assessor, and penalties can apply to rentals that are not registered. A.R.S. § 9-500.39(J) keeps this duty in place for short-term rental owners.