Short-term rentals in Tempe, explained properly.

Sec. 16A-213(c) sets a non-refundable fee of $250 that must accompany every application, including renewals, for each short-term rental license, and reduces the fee by 25% for a new license issued on or after July 1 of any calendar year for the rest of that year. The fee is set in the ordinance itself (O2023.01, adopted January 5, 2023; the section was amended by O2024.52 on November 21, 2024 and O2026.01 on January 8, 2026), not in a separate fee schedule. The City page lists $250 per property for January through June and $187.50 if issued on or after July 1, and says the fee is non-refundable.

Sec. 16A-213(b) lists the minimum contents of the application, which are made publicly available: the physical address; the name, address and phone number of the owner (and for an entity, its legal name and statutory agent); the same for each designee; the full name, address and 24-hour phone number of the emergency point of contact; proof of a valid transaction privilege tax license; the owner's acknowledgment that the owner and each designee is not a registered sex offender and has not been convicted within the past five years of a felony act causing death or serious physical injury or a felony use of a deadly weapon; an attestation of compliance with the neighbor notification rule; evidence of liability insurance of at least $500,000 (or that each rental will be booked through a platform with equal or greater primary coverage); evidence of registration with the Maricopa County Assessor's Office (a rental of a room or rooms within a property is exempt from this item); and, for an individual applicant, proof of lawful presence in the United States.

Sec. 16A-213(g) says licenses expire annually on December 31 and may be renewed for successive annual periods if the holder is in compliance. A rental that is not timely renewed is treated as operating without a license and is subject to penalties, and licenses not renewed within 30 days after expiration are deemed cancelled and subject to the original application process. The City page says license renewal begins October 1 and to renew by December 31 to avoid penalties. Under Sec. 16A-213(d), the City issues or denies the license within seven business days after receiving a complete application. Holders must give the City written notice of any change to the application information at least 10 days before the change takes effect (Sec. 16A-213(f)).

Within the seven-business-day review, Sec. 16A-213(d) lets the City deny a license if the applicant failed to provide required information, failed to pay the fee, or gave false information; if the owner or designee is a registered sex offender, has been convicted of a felony act that resulted in death or serious physical injury, or has been convicted of a felony use of a deadly weapon within five years of applying; or if, at the time of application, the owner has a suspended license for the same rental, or there has been one violation resulting in or constituting an offense described in Sec. 16A-221, or three violations of the article at the rental within a twelve-month period (not counting an aesthetic, solid waste or vehicle parking violation that is not also a serious threat to public health and safety). Notice of a denial is mailed or emailed and includes the right to appeal under Sec. 16A-222.

Sec. 16A-213(i) says no license shall be transferable either as to location or as to person. A new owner or a different address needs its own application, fee and license.

The owner or emergency point of contact named on the application must be available by phone or text within 30 minutes of first contact about a complaint, incident or emergency for which public safety personnel are dispatched (Sec. 16A-214(a)). All other complaints must be answered in person, by phone, email or text within 24 hours (Sec. 16A-214(b)). Contact is the first actual contact or a documented attempt, such as a voicemail or email. The owner must give the City written notice of a change of emergency contact at least 10 days before it takes effect; an owner can face a civil penalty of up to $1,000 for every 30 days the notice is not given, after 30 days' written notice of violation (Sec. 16A-214(c), (e)).

Sec. 16A-216 requires the owner or designee, before offering the rental for the first time, to give written notice in the City's form to each single-family residential property adjacent to, directly across from and diagonally across the street from the rental. For a multiple-residence unit, notice goes to the owners or residents of all residential units on the same floor of the same building. The notice must include the City license number, the physical address of the rental, and the name, physical address, email address and 24-hour phone number of the emergency point of contact. Any change to that information requires new notice not later than five days before the change. The owner or designee must give the City an attestation of compliance. The City page says the notice follows license approval and the attestation is emailed to the City.

Before offering or renting a short-term rental for the first time, liability insurance of at least $500,000 in the aggregate must be provided by the owner or the online marketplace platform (Sec. 16A-218(a)). Within 30 days of obtaining the license, the owner or designee must give the City evidence of that coverage or evidence that each rental transaction will be provided through an online lodging marketplace with equal or greater primary liability coverage. Each day a rental lacks the required insurance is a separate violation (Sec. 16A-218(c)).

Sec. 16A-217 makes the owner or designee responsible for displaying the City short-term rental license number on each advertisement. A violation is a civil offense and each non-compliant advertisement counts as a separate violation. The state TPT license number must also appear in advertising (see the Arizona state rules above).

Sec. 16A-219 requires the owner or designee, no later than 24 hours before every stay, to run a background check on the person booking through the Department of Justice's online national sex offender public website, and to keep a hard-copy or electronic record for twelve months after the booking date, available to the City for inspection on demand during normal business hours. The requirement is satisfied or waived if the online lodging marketplace where the rental is advertised performs the check; if the platform fails to, the owner remains liable.

Sec. 16A-215(b) prohibits using a short-term rental property for any of these purposes: any nonresidential use; holding a special event that requires a permit or license; operating a retail business, restaurant, event center, banquet hall or similar use; housing sex offenders; operating or maintaining a sober living home; selling liquor, illegal drugs or pornography; operating a nude or topless dancing business; obscenity; an adult-oriented business; or any other use prohibited by A.R.S. § 9-500.39 or the City Code. A short-term rental must also comply with federal, state and local laws on health and safety, sanitation, solid waste, tax licensing, property tax registration, traffic, noise, property maintenance and nuisance abatement (Sec. 16A-215(a)). No one may accept a fee for facilitating a rental that operates in violation of the code (Sec. 16A-215(d)).

Sec. 16A-221(b) lets the City impose civil penalties for a verified violation of the article, or a failure to perform a required duty, at the same rental within the same twelve-month period: up to $500 or up to one night's advertised rent, whichever is greater, for the first; up to $1,000 or two nights' rent for the second; and up to $3,500 or three nights' rent for a third and any later violation. Multiple violations arising from the same response to one incident count as one violation. A property that fails to apply for a license within 30 days after the application process is made available must cease operations immediately, and the City may impose a civil penalty of up to $1,000 per month if the owner fails to apply within 30 days of written notice (Secs. 16A-213(h), 16A-221(c)). Online listings that reference the property are prima facie evidence that a short-term rental is operating. Violations of most sections are also civil offenses, and the remedies are cumulative.

Under Sec. 16A-220 the Licensing Officer may start an administrative process to suspend a license for up to twelve months for three verified violations of the article within a twelve-month period (not counting aesthetic, solid waste or vehicle parking violations that are not also a serious threat to public health and safety), or for one verified violation that results in or constitutes a felony at or near the rental by the owner or designee, a serious physical injury or wrongful death from knowing, intentional or reckless conduct, knowingly housing a sex offender, allowing adult-business or prostitution offenses, operating a sober living home, or allowing a permit-requiring special event or a retail, restaurant or banquet use. Separately, Sec. 16A-223 allows judicial relief suspending the property's use as a short-term rental for up to twelve months from the date of the violation after a felony act causing death or serious physical injury (or an attempt).

Under Sec. 16A-222, anyone aggrieved by a license denial, suspension or penalty may file a written appeal on the City's form with the Licensing Officer no later than ten business days from the date of the decision letter. The respondent may respond in writing within ten business days of the effective date of notice and ask for a hearing; the hearing is scheduled not less than fifteen nor more than thirty days after the request is received, before a Hearing Officer designated by the Financial Services Director. An appeal does not stay a license suspension.

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.