- Which rules apply to your address
- What Arizona law allows cities to do
- The City of Sedona permit
- Keeping the permit: the owner checklist
- Fines, suspension and complaints
- Taxes: TPT, bed tax and the numbers
- Village of Oak Creek and Yavapai County
- Oak Creek Canyon and Coconino County
- HOAs
- What changed, 2022 to 2026
- How many rentals Sedona has
- Buying or selling a permitted rental
Which rules apply to your address
“Sedona” is three jurisdictions. The City of Sedona has its own permit program. The Village of Oak Creek is not in the city; it is unincorporated Yavapai County. Oak Creek Canyon north of town is unincorporated Coconino County. The city itself straddles the Yavapai and Coconino county line, which changes the tax rate but not the permit. Before anything else, find out which one you are in.
| Area | Jurisdiction | Permit | Lodging tax, all layers |
|---|---|---|---|
| West Sedona, Uptown, Chapel area, inside city limits | City of Sedona | City STR permit, $210 per unit per year | 13.325% (Yavapai side) or 13.9% (Coconino side) |
| Village of Oak Creek, Big Park, Red Rock Loop, Cornville | Yavapai County, unincorporated | No county permit. State TPT license and county assessor registration only | 6.325% |
| Oak Creek Canyon, north of the city line | Coconino County, unincorporated | Coconino County STR permit, $250 per unit per year | 6.9% |
How to check: the City of Sedona’s permit staff will tell you whether an address is inside city limits, and both counties publish parcel maps. The parcel number on your deed or tax bill identifies the county. If the answer matters to a purchase, confirm it in writing before you close.
What Arizona law allows cities to do
Arizona decides most of this at the state level. Since 2016 the statute has said that a city or town “may not prohibit vacation rentals or short-term rentals,” and the county statute says the same for unincorporated areas. A 2022 law, SB 1168, then listed exactly what local governments may require. Everything in Sedona’s program traces back to that list.
- A permit or license, with a fee of the actual cost or $250 per year, whichever is less.
- Liability insurance of at least $500,000 in the aggregate, or a booking platform that carries equal coverage.
- An emergency contact who answers around the clock.
- Notice to neighbors before the first rental.
- The permit number in every advertisement.
- Health, safety, nuisance and zoning rules applied the same way as to any other home.
- Since September 14, 2024, an owner-residency condition for a rental in an accessory dwelling unit finaled on or after that date.
The statute also sets the penalty ladder every Arizona city uses: $500 or one night’s rent for a first verified violation, $1,000 or two nights for a second, $3,500 or three nights for a third within twelve months, and permit suspension for up to twelve months after three verified violations in a year or one serious one. What no city may do is cap the number of rentals, require owner occupancy of a regular house, or ban rentals in a zone. The city’s own FAQ says it plainly: “No Arizona city or town is currently permitted to cap the number of short-term rentals.”
Bills that did not pass in 2026. HB 2429 would have set an occupancy limit of two guests per bedroom and allowed suspension after two violations in 24 months. SB 1076 would have let towns under 70,000 people, which includes Sedona, cap permits and set spacing between rentals. Both died without a Senate vote. The city’s legislative page says there is “no meaningful, active legislation moving through the Arizona Legislature.” Expect both ideas back in 2027.
Sources: A.R.S. 9-500.39 and 11-269.17; Laws 2022, Ch. 343 (SB 1168); Laws 2024, Ch. 196 (HB 2720); HB 2429; SB 1076.
The City of Sedona permit
Sedona adopted its permit program in November 2022 (Ordinance 2022-11, City Code Chapter 5.25) and required every short-term rental inside city limits to hold a permit by February 15, 2023. The code has been amended twice since, in March and October 2025. The rules that matter to an owner or buyer:
| Item | Rule |
|---|---|
| Who needs it | Any rental of fewer than 30 days inside city limits. Rentals of 30 days or more do not need a permit. |
| One permit per unit | “Each short-term rental unit requires its own city-issued short-term rental permit.” A main house and a casita advertised separately are two units and two permits. |
| Fee | $210 per unit per year, non-refundable and non-transferable. The state cap is $250. |
| Term | One year from the date of issue, renewed annually at the same fee. |
| Late renewal | From January 1, 2026: $50 if renewed 2 to 90 days late, $100 if more than 90 days late. One-time fees, capped at $100. |
| Incomplete applications | Denied since October 23, 2025, rather than held open. |
| Before you apply | An Arizona TPT license from the Department of Revenue. The city will not issue a permit without it, and the code says a rental without a valid TPT license “shall not be rented.” |
| How to apply | Through the city’s online portal (GovOS / MUNIRevs). The STR Program Supervisor sets up the account; see the city’s short-term rental page for the current contact. |
| Decision time | State law requires a decision within seven business days of a complete application. |
| When the house sells | The permit does not transfer. The seller must pull every listing at closing and the buyer applies for a new permit in their own name. |
Verify before you rely on it. The fee, late fees and the one-permit-per-unit rule come from the city’s own pages and code as of October 26, 2026. The city changes these by ordinance, usually in the fall. The city’s short-term rental page is the source of truth.
Sources: Sedona City Code Chapter 5.25; City of Sedona short-term rental page, owner responsibilities and FAQ.
Keeping the permit: the owner checklist
These are the standing obligations in Chapter 5.25. Most of the fines the city issues are for missing one of them, not for guest behavior.
| Obligation | What the code requires |
|---|---|
| Insurance | Liability coverage “in the aggregate of at least $500,000.” Proof within 10 days of the city asking. |
| Emergency contact | An owner or designee reachable 24 hours a day. Changes reported within 10 days. The fine for operating without one is $1,000 per 30 days. |
| Neighbor notice | Before the first rental: written notice to the adjacent, directly-across and diagonally-across single-family properties, by certified mail or hand delivery, with the permit number and emergency contact. You attest to the city that it was done. |
| Permit number in listings | On every advertisement and listing, on every platform. State law separately requires the TPT license number on every ad. |
| Posted notice inside | In 14-point or larger bold type, within 10 feet of the main entrance: the location of fire and life-safety equipment and the list of prohibited uses. |
| Guest screening | A sex-offender registry check at least 24 hours before check-in, or evidence that the platform performs one. Records kept for 12 months. |
| Events | None, of any size. Weddings, retreats and workshops are prohibited uses, and a single event counts as a serious violation. |
| Trash | Cans out no earlier than noon the day before pickup, back in by 11:59 p.m. on pickup day. |
| Accessory dwellings | A casita or ADU with a certificate of occupancy dated September 14, 2024 or later may be rented short-term only if the owner lives in the main house. |
What the city does not regulate for rentals specifically: occupancy limits, parking counts and quiet hours. General city nuisance and noise rules apply to every house; the FAQ directs noise complaints after 10 p.m. to the police. Septic and wastewater: no rental-specific rule was found in the code verify, but a property on septic still answers to county health rules for the number of bedrooms the system was sized for, which matters when a buyer plans to sleep twelve.
Sources: Sedona City Code 5.25.040 through 5.25.100; city owner responsibilities.
Fines, suspension and complaints
Since July 2025 the city has a dedicated STR code enforcement officer, and the first weeks produced about 50 citations for permit violations. The schedule is the state’s:
| Verified violation within 12 months | Civil penalty |
|---|---|
| First | Up to $500, or one night’s rent, whichever is more |
| Second | Up to $1,000, or two nights’ rent |
| Third and after | Up to $3,500, or three nights’ rent |
| Three in 12 months, or one serious violation | Permit suspended for up to 12 months |
| Operating without applying, after notice | Up to $1,000 per month |
| False information on an application | Permit suspended until corrected (since October 2025) |
A serious violation means a felony at the property, a death or serious injury, a registered sex offender as a guest, or a special event. Any violation of the chapter is also a misdemeanor with a $500 minimum. Complaints go to the city’s 24-hour hotline or its online complaint form, both listed on the city’s short-term rental page.
Sources: Sedona City Code 5.25.110 and 5.25.120; City Talk column, June 24, 2026.
Taxes: TPT, bed tax and the numbers
Arizona has no sales tax in the usual sense; it has the transaction privilege tax, TPT. Short-term lodging pays the state rate, a county rate, and in Sedona two city rates. The Department of Revenue collects all of it on one return.
| Layer | Yavapai side of Sedona | Coconino side of Sedona |
|---|---|---|
| State and county transient lodging, combined | 6.325% | 6.9% |
| City of Sedona hotel tax | 3.5% | 3.5% |
| City of Sedona additional hotel tax | 3.5% | 3.5% |
| Total on each booking | 13.325% | 13.9% |
Rates from the Department of Revenue tax rate table effective October 1, 2026, and the city’s own FAQ, which shows the same totals. The state and county layers are shown combined because the table lists them that way for transient lodging; the state share is 5.5 percent verify. Outside the city, in the Village of Oak Creek or Oak Creek Canyon, only the state and county layers apply.
What owners get wrong about TPT
- You need your own TPT license even if Airbnb collects the tax. Platforms have collected and remitted on bookings they process since 2019. The owner is still required to hold a license, file a return and report that income with the marketplace deduction. Owners who book only through platforms may file annually.
- Direct bookings are on you. Anything booked outside a platform, you collect and remit yourself.
- The TPT number goes in every ad. State law requires it on each advertisement, including platform listings. Penalty $250 for a first offense and $1,000 for a second.
- The 2025 repeal of city tax on residential rentals does not apply to you. SB 1131 ended city tax on long-term residential rent after December 31, 2024. Stays under 30 days are transient lodging and still pay.
- Register with the county assessor. Arizona requires owners of residential rental property to keep their contact details on file with the county assessor, and the STR statute says that still applies. Penalties run $150 per day or a $1,000 flat penalty plus $100 a month, depending on the county’s notice.
Tax rules are general information, not advice. Rates and filing options change. Confirm your situation with your CPA before you buy or file.
Sources: ADOR online lodging marketplace, short-term lodging, residential rental guidelines, Sedona city profile and rate table, October 1, 2026; A.R.S. 42-5042 and 33-1902; Laws 2023, Ch. 204 (SB 1131).
Village of Oak Creek and Yavapai County
The Village of Oak Creek, Big Park, Red Rock Loop and Cornville are unincorporated Yavapai County. The Big Park Regional Coordinating Council is advisory; the county holds the authority, and the county has chosen not to run a permit program. Its planning FAQ says only that since January 1, 2017 the county “allows the short-term rental of permitted habitable structures” and that owners “must register with the Yavapai County Assessor’s office for any type of rental.”
- No county permit, license or fee. verify No county page states this in so many words; it follows from the FAQ and from the Board of Supervisors’ August 2025 request to the Legislature for “registration and fees” authority the county says it lacks. The state TPT license is still required.
- Only permitted habitable structures. No RVs, tents, yurts, sheds or garages as rentals. Bed-and-breakfast room rentals only in an owner-occupied home.
- No events. The county does “NOT allow events such as weddings, parties, specialized retreats, or any commercial activities.”
- Zoning definition added December 2025. The county’s zoning ordinance now defines short-term rental and excludes retail, restaurant, banquet and event-center uses. A full zoning rewrite is under way with completion estimated for late 2027 verify.
- No county rules on insurance, emergency contacts, neighbor notice, posting, occupancy, parking or quiet hours. State law and the sheriff’s noise enforcement are what apply.
- Enforcement is complaint-based through the county’s Land Use and Code Enforcement Unit. There is no county fine schedule for rentals.
- Tax: 6.325 percent combined state and county on each booking, filed on the state TPT return. No city layers.
- HOAs matter more here. With no county permit, the recorded declaration of each association is the real rulebook. See the HOA section below for the Village of Oak Creek Association.
Sources: Yavapai County Development Services FAQ (updated August 13, 2025) and Code Enforcement Unit; Big Park Regional Coordinating Council FAQ; ADOR rate table, October 1, 2026.
Oak Creek Canyon and Coconino County
Oak Creek Canyon north of the city line, and the unincorporated edges east of town, are Coconino County. Unlike Yavapai, Coconino runs a permit program that closely mirrors Sedona’s, adopted in August 2023, effective November 14, 2023, and amended in December 2023 and December 2025.
| Item | Coconino County rule |
|---|---|
| Permit | Required. “It is unlawful to operate an STR without a County-issued permit.” One permit per unit, registered annually through the Community Development portal. |
| Fee | $250 per year. |
| Insurance | At least $500,000 in the aggregate. Airbnb’s host coverage is accepted for Airbnb-only rentals. |
| Contact | An owner or designee able to respond to complaints or emergencies at any time of day. Fine for none: up to $1,000 per 30 days. |
| Neighbor notice | All single-family properties adjacent to, directly across and diagonally across the street. |
| Display | County permit and TPT license posted inside the unit; permit number on each advertisement. |
| Access | Driveways and access kept clear for emergency vehicles, a canyon-specific concern. |
| Prohibited | Special events, sober-living or sex-offender housing. The rental must be a code-compliant dwelling, not an RV, tent or garage, and occupancy must fit the county’s definition of a family, which caps unrelated occupants at five. |
| Accessory dwellings | From January 1, 2026, an ADU finaled on or after that date can be rented short-term only if the owner lives on the property. |
| Fines | Up to $500 or one night’s rent, then $1,000 or two nights, then $3,500 or three nights. Failure to register: $1,000 plus $1,000 for every 30 days. Suspension up to 12 months after three verified violations in a year or one serious violation, and no new permit for a year after. |
| Tax | 6.9 percent combined state and county, filed on the state TPT return. No city layers. |
Two canyon-specific notes. Cabins on National Forest land under a Forest Service recreation-residence permit cannot be rented commercially; the program’s terms say “Commercial or time-share use is not allowed” verify for the specific cabin. Private inholdings in the canyon use the county permit. And the county’s own FAQ says its permit applies only outside incorporated areas, which means a Sedona city address never needs both.
Sources: Coconino County short-term rental information, FAQ (April 2025) and Ordinance 2023-04 as amended by 2025-11; USDA Forest Service recreation residence program.
HOAs
State preemption binds cities and counties, not homeowners associations. Arizona’s planned-community and condominium statutes both say a member may rent “unless prohibited in the declaration” and must follow the declaration’s rental time-period restrictions. So an HOA whose recorded declaration restricts rentals under 30 days can enforce that, and several Sedona communities do.
The limit on HOAs is how they add a restriction later. In Kalway v. Calabria Ranch HOA (Arizona Supreme Court, 2022) the court held that an amendment to CC&Rs is unenforceable unless the original declaration gave owners sufficient notice that such a change was possible verify. That ruling is why the Village of Oak Creek Association told its members in 2026 that its 2017 rental amendment is void and that it will register short-term rentals rather than prohibit them. Sub-associations inside the Village have their own declarations and are not covered by that statement.
Before buying any Sedona-area home as a rental, read the recorded declaration for every association that governs the lot, not the summary on the listing. If the declaration is silent, the HOA cannot stop you; if it restricts rentals in the original document, it can.
Sources: A.R.S. 33-1806.01 and 33-1260.01; Why the VOCA rental ban is unenforceable.
What changed, 2022 to 2026
- July 2022. SB 1168 signed. Cities get permit, insurance, notice and penalty authority.
- November 2022. Sedona adopts Chapter 5.25. Permits required by February 15, 2023.
- August 2023. SB 1131 repeals city tax on long-term residential rent from 2025. Transient lodging unaffected.
- May 2024. HB 2720 lets cities require owner residency for rentals in new accessory dwellings finaled after September 14, 2024. Sedona adopted it.
- October 2024. 1,203 active permitted rentals, 17.75 percent of residences.
- December 2024. Council declares a housing shortage emergency “exacerbated by the proliferation of Short-Term Rentals.” Each advertised unit now needs its own permit.
- March 2025. Ordinance 2025-02 amends Chapter 5.25 verify the content.
- April 2025. Rent Local, the program that paid owners $3,000 to $10,000 a year to convert rentals to long-term leases, raises its cap. By 2026 the program is listed as on hold.
- July 2025. Dedicated STR enforcement officer hired. About 50 citations in the first weeks.
- October 2025. Ordinance 2025-10: late fees from January 1, 2026, a compliance attestation, denial of incomplete applications, suspension for false information.
- November 2025. Court of Appeals rules the city cannot bar rentals at the Oak Creek Mobilodge mobile-home park. The city indicated it would appeal verify status.
- June 2026. 1,440 permitted units on 1,300 parcels, 18.98 percent of residential housing. Permit compliance 98 to 99 percent.
- 2026 session. HB 2429 and SB 1076 die. The council defers a possible 2028 ballot strategy.
Sources: city ordinance history in Chapter 5.25; council resolution of December 10, 2024 (AB 3149); City Talk, June 24, 2026; city Rent Local page; Arizona Capitol Times, Verde Independent and KNAU for items marked verify.
How many rentals Sedona has
As of the city’s June 2026 count, 1,440 permitted rental units sit on 1,300 parcels inside city limits, which the city puts at 18.98 percent of residential housing. That is up from 1,203 units and 17.75 percent in October 2024. Nearly every operating rental is permitted; the city reports 98 to 99 percent compliance. The counties do not publish comparable counts for the Village of Oak Creek or Oak Creek Canyon.
On the sales side, one in five Sedona single-family homes sold in 2026 was marketed on its rental potential. Permitted, furnished houses with a booking history are their own market now.
Buying or selling a permitted rental
Buying. The permit does not come with the house. Budget for your own application, the TPT license, insurance proof and neighbor notices, and plan for the gap between closing and your first guest. Confirm the jurisdiction, the HOA declaration, and whether any casita was finaled after September 14, 2024. Ask the seller for the permit history and any violation notices; a suspended permit follows the property’s record even if it does not follow the owner.
Selling. Your permit, your booking history and your compliance record are part of what you are selling, even though the permit itself ends at closing. Future reservations can be honored, transferred or wound down by contract. If you want a number, request a valuation and Will prices the house against permitted, rental-marketed sales rather than bare comps.
This page is general information from a licensed Arizona real estate broker, not legal or tax advice. Every rule above links to its source and was checked on the date shown at the top. The city, county and state pages control if anything here is out of date. Confirm your situation with your attorney and CPA.