STRWATCH.AI 50/50 MARKETS · UPDATED 2026-07-18 · ALL CITIES
STRWATCH.AI / AZ / Sedona

Is a short-term rental legal in Sedona, AZ?

REGULATED

Short-term rentals (stays under 30 days) are legal citywide in Sedona and cannot be banned or capped: A.R.S.

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Sources checked2026-07-179 open items listed below

A.R.S. § 9-500.39 bars Arizona cities from prohibiting STRs, restricting them based on classification/use, or capping their number; Sedona's own FAQ confirms no cap is permitted. Both hosted (rooms, casitas, guest houses) and unhosted whole-home rentals are allowed with a city permit and TPT license (Sedona City Code Ch. 5.25). Rentals of 30+ days need no STR permit. Eligible: single-family homes, 1-4 unit buildings, condos/townhomes, individual rooms, guest houses/casitas. Not eligible: 5+ unit apartment complexes, RVs, tents, non-dwelling structures; commercial lodging (hotels, B&Bs) is exempt from the permit. Special events of any size (weddings, receptions, retreats, conferences) are prohibited at STRs (SCC 5.25.050). No occupancy/guest cap exists (state law did not authorize one as of 2026-07-17; HB 2429, which would have, died April 2026). Per § 9-500.39 as amended, accessory dwelling units permitted after Sept. 14, 2024 may be restricted from STR use unless the owner resides on the property.

What you need to operate

City of Sedona Short-Term Rental Permit $210/year per rental unit (non-refundable, non-transferable); was $200/year until at least Oct 2025
City of Sedona (Short-Term Rental Program, GovOS/MUNIRevs portal)
Renewal: Annual - expires one year from activation date; GovOS/MUNIRevs emails a 60-day renewal notice
Required for every rental of a dwelling unit under 30 consecutive days (Sedona City Code Ch. 5.25, adopted Ord. 2022-11, 11-22-2022; program mandatory since Feb. 15, 2023). Each unit needs its own permit. Application requires owner/designee contact info, emergency contact, and proof of a valid AZ TPT license. State law (A.R.S. § 9-500.39) caps the fee at actual issuance cost or $250, whichever is less. Verified on the city's official page via Wayback snapshots of 2026-02-12 and 2026-05-04 ($210) and 2025-03-21/2025-10-29 ($200) because sedonaaz.gov bot-walls direct fetches.
official source
Arizona Transaction Privilege Tax (TPT) license $12 state license fee (A.R.S. § 42-5005(A)); Sedona municipal license fee $2, renewal $0 (ADOR Sedona profile)
Arizona Department of Revenue (AZTaxes.gov)
Renewal: Annual
A.R.S. § 42-5042 requires online lodging operators to obtain a current TPT license before offering lodging for rent and to list the TPT license number on each advertisement; civil penalty $250 first offense, $1,000 subsequent. The city requires proof of TPT license before issuing the STR permit. ADOR: file returns even for $0 periods; direct bookings reported under codes 025 (state/county) and 044/144 (city).
official source
Liability insurance Market rate - minimum $500,000 aggregate coverage per rental unit
City of Sedona / A.R.S. § 9-500.39
Renewal: Continuous
City requires liability insurance of at least $500,000 aggregate per unit (SCC 5.25.090); A.R.S. § 9-500.39 authorizes requiring this minimum or equivalent coverage through an online lodging marketplace.
official source
Neighbor notification Certified mail costs only
City of Sedona
Before operating, owner must notify each single-family property adjacent to, directly across from, and diagonally across the street from the STR (SCC 5.25.060; authorized by A.R.S. § 9-500.39). Notice must include STR address, city permit number, and emergency contact name, physical address, email and 24-hour phone; sent by certified mail return-receipt or hand-delivered.
official source
Emergency contact registration and upkeep Cost not verified
City of Sedona
Renewal: Update GovOS/MUNIRevs account within 10 days of any change
Owner, owner's designee and 24/7 emergency contact information required (SCC 5.25.040). City runs a 24/7 complaint hotline (928-203-5110) that calls the emergency contact. Contact info is public record. A.R.S. § 9-500.39 allows fines up to $1,000 per 30 days for failing to provide emergency contact after notice.
official source
Sex offender background check per booking Cost not verified
City of Sedona
Renewal: Every booking - at least 24 hours before check-in
Owner must conduct a sex offender background check at least 24 hours before guest check-in or show the online lodging marketplace did so (SCC 5.25.100); keep each check 12 months after booking and provide to the city on request. No sex offender may rent or occupy the STR; marketplace failure does not relieve the owner.
official source
Advertising requirements Cost not verified
City of Sedona / Arizona Department of Revenue
City STR permit number must appear on every advertisement and listing (SCC 5.25.070); AZ TPT license number must appear on each ad (A.R.S. § 42-5042). Listings must state Sedona's special-event prohibition; 30+ day rentals must show a 30-day minimum stay in listings or the city will require a permit.
official source
On-site posted notice Cost not verified
City of Sedona
Laminated or shielded notice in 14-point or larger bold font posted within 10 feet of the unit's primary entrance, locating fire/life-safety equipment and stating city noise and waste-disposal rules (SCC 5.25.080). Trash cans out no earlier than noon the day before pickup, in by 11:59 p.m. pickup day.
official source

The full picture

Short-term rentals (stays under 30 days) are legal citywide in Sedona and cannot be banned or capped: A.R.S. § 9-500.39 (SB 1350 of 2016, amended by SB 1168 of 2022) preempts Arizona cities from prohibiting STRs or restricting them by use, but lets them require a local permit. Sedona requires an annual, non-refundable, non-transferable STR permit of $210 per rental unit (raised from $200 between Oct 2025 and Feb 2026; state law caps the fee at actual cost or $250) under Sedona City Code Chapter 5.25 (adopted by Ord. 2022-11, Nov. 22, 2022; mandatory since Feb. 15, 2023), applied through the GovOS/MUNIRevs portal. Before operating, an owner must hold an Arizona TPT license, carry at least $500,000 aggregate liability insurance per unit, register a 24/7 emergency contact, and notify adjacent, directly-across and diagonally-across single-family neighbors by certified mail or hand delivery. Ongoing duties: city permit number on every listing, TPT license number on every ad (A.R.S. § 42-5042), a posted safety/noise notice within 10 feet of the entrance, and a sex-offender background check on guests at least 24 hours before each check-in (records kept 12 months). Special events (weddings, retreats, workshops) at STRs are prohibited (SCC 5.25.050). Violations carry city penalties of $500 up to $3,500 (SCC 5.25.120) and permits can be suspended for 12 months after three verified violations in 12 months or one serious violation (SCC 5.25.110). Total lodging TPT is 13.90% in the Coconino County portion and 13.325% in the Yavapai County portion (state/county 6.90%/6.325% + Sedona 3.5% hotel tax + 3.5% bed tax); registered marketplaces like Airbnb/Vrbo must remit TPT on their bookings. A 2026 state bill (HB 2429) that would have allowed occupancy limits died in the Senate in April 2026.

Taxes on guests & hosts

TaxRateApplies toPlatform collectsOfficial source
State + county TPT on transient lodging (business code 025) Coconino County portion of Sedona: 6.90% combined; Yavapai County portion: 6.325% combined (state transient lodging rate 5.5% + county excise) Gross income from lodging stays under 30 days (Sedona straddles both counties) Yes source
City of Sedona hotel TPT (business code 044) 3.50% Lodging stays under 30 days within Sedona city limits (city code SE) Yes source
City of Sedona hotel/motel additional tax - bed tax (business code 144) 3.50% (3.0% originally; 3.5% effective Jan 1, 2014) Lodging stays under 30 days; stacks with code 044 for a total city rate of 7.0% and combined totals of 13.90% (Coconino side) / 13.325% (Yavapai side), figures confirmed on the city's official STR FAQ Yes source

Enforcement

PenaltiesCity: violations of Sedona City Code Ch. 5.25 are punishable as a misdemeanor and civil offense with penalties from $500 up to $3,500 (SCC 5.25.120, per the city's official STR pages). Permit suspension up to 12 months for three verified violations within 12 months (excluding purely aesthetic/solid-waste/parking violations not threatening health/safety) or one serious violation (felony at the property, serious injury/wrongful death, housing a sex offender, sober-living operation, or holding a special event/nonresidential use) - SCC 5.25.110, verified text; one-year wait to reapply after denial/revocation. State (A.R.S. § 9-500.39): civil penalties per 12-month period of up to the greater of $500 or one night's rent (1st), $1,000 or two nights (2nd), $3,500 or three nights (3rd+); up to $1,000 per 30 days for failure to provide emergency contact. TPT advertising violations: $250 first / $1,000 subsequent offense (A.R.S. § 42-5042).
Platform liabilityOnline lodging marketplaces must be licensed with ADOR and remit all state, county and city TPT on transactions they facilitate (A.R.S. § 42-5005(L), mandatory since Jan 1, 2019); hosts deduct OLM-collected income under deduction code 775. City sex-offender check duty remains on the owner even if the marketplace fails to run it.
NotesCity operates a 24/7 STR complaint hotline (928-203-5110) with a dedicated Short-Term Rental Program Supervisor; complaints route to the emergency contact, code enforcement, or police (noise after 10 p.m.). Suspension notices allow a hearing request within 15 days; appeals per SCC 5.25.130.

Pending changes

  • HB 2429 (57th Leg., 2nd Reg. Sess., 2026) would have amended A.R.S. § 9-500.39 to let cities set STR occupancy limits (roughly two occupants per bedroom plus two additional, excluding minors) and extend the verified-violation lookback for suspensions from 12 to 24 months. Passed the Arizona House (twice, after amendment) but missed Senate committee deadlines and was reported 'likely dead' for the 2026 session on April 7, 2026; never reached the Governor. Similar preemption-loosening bills recur each session - watch the 2027 session. — proposed, 2026-04-07 [news]
  • Sedona 'Rent Local' incentive program (verified on the city's official page, snapshot 2025-04-26): pays STR owners who sign a 1-year+ lease with a local worker and refrain from short-term renting - $6,000-$10,000/year for full units (studio to 3BR), $3,000-$5,000/year for shared-space rooms. The city's housing section now lists a '2026 Balanced Housing Strategy' whose STR-relevant provisions have not been verified - current program status and any new incentives/rules are pending re-verification. — proposed, 2025-04-26 [official]

What we could not verify (9)

  • BOT-WALLS: www.sedonaaz.gov (Akamai) returns 403 to all non-browser fetchers and to the research agent's headless browser; sedona.municipal.codes (Cloudflare/General Code) allowed one request then IP-blocked. All city-page facts were instead verified against Wayback Machine captures of the official pages (most recent: 2026-05-04 for the responsibilities page, 2026-04-02 for the FAQ). A reviewer with a full headless browser should confirm the live pages match, especially the permit-application-requirements page (never archived, never fetched).
  • PERMIT FEE: $210/year verified on the city's official responsibilities page as archived 2026-02-12 and 2026-05-04 (was $200 through at least 2025-10-29). Search-engine snippets of the current live page also say $210, but the live page could not be fetched directly; confirm $210 is still current as of 2026-07-17 and find the effective date of the increase (likely the FY2026 Consolidated City Fee Schedule, which is bot-walled).
  • CITY CODE TEXT: Of Sedona City Code Ch. 5.25, only the chapter table of contents (sections 5.25.010-5.25.140, code current through Ord. 2024-09 of 11-12-2024 as of the Dec 2024 snapshot) and the full text of § 5.25.110 (Permit suspensions, citing Ord. 2022-11 § 1, 11-22-2022 and Res. 2022-36) were read directly from the official code portal. Sections 5.25.030 (permit/renewal), .050 (use regulations), .060, .070, .080, .090, .100, .120 (penalties) were verified only through the city's own official STR pages summarizing them. Reviewer should pull full chapter text from sedona.municipal.codes/SCC/5.25 and check for any post-2024 amendments.
  • PENALTY RANGE: The '$500 up to $3,500' city penalty figure comes from the city's official Property Owner Responsibilities page (citing SCC 5.25.120), not from the code section text itself, which could not be fetched.
  • MAX GUESTS: Set to null - no occupancy cap was found and state law did not authorize one as of the 2026 session (HB 2429, which would have, died). Confirm Sedona has not adopted any occupancy standard through another mechanism.
  • PERMIT ISSUANCE TIMELINE: A.R.S. § 9-500.39 requires cities to issue or deny a permit within 7 business days; whether Sedona's process states this was not verified.
  • 2026 LEGISLATION: HB 2429 reported 'likely dead' on 2026-04-07 (Arizona Capitol Times) and the session's final bill signings have occurred per Arizona Mirror; the fate of SB 1076 (Finchem) and SB 1105 (Kavanagh), both of which would also have amended § 9-500.39, was not individually verified. Confirm neither was enacted in the 2026 session.
  • RENT LOCAL: Program details verified from the official city page as archived 2025-04-26; its current funding/status as of 2026-07-17 is unverified (the city site's housing section now references a '2026 Balanced Housing Strategy').
  • ONLINE LODGING MARKETPLACE RATE: The July 2026 rate table shows a separate 'Online Lodging Marketplace' state/county code 325 rate (Coconino 6.60%, Yavapai 6.325%) that differs slightly from the operator code 025 rate on the Coconino side (6.90%); the taxes[] entries use the operator (025) rates that the city FAQ also quotes. A tax professional should confirm which combined rate applies to marketplace-facilitated bookings on the Coconino side.

Sources

A markdown mirror of this page lives at /sedona-az.md for AI tools and researchers.

STRWatch publishes educational information about short-term rental regulation, checked against the official sources linked above as of the date shown. It is not legal advice, and rules change — a city can move between the times we check it. For decisions with money at stake, confirm with the authority linked above or a local attorney.