Short-term rental rules and permits in Sedona and the Verde Valley
What Arizona and each town require before you list a short-term rental, written for buyers. We review this page regularly as laws change.
Last updated October 18, 2026
General information, not legal or tax advice. Rules change. Confirm current requirements with the city, town, or county and the Arizona Department of Revenue before you buy or list.
Arizona state law
- A.R.S. 9-500.38 (SB1350, 2016): cities and towns may not prohibit short-term rentals or regulate them by classification, use, or occupancy. Source
- A.R.S. 9-500.39 (SB1168, 2022): cities may require a local permit (fee capped at the lesser of cost or $250), an emergency contact, neighbor notification, liability insurance, and escalating penalties. The TPT license number must appear on ads. Source
- A.R.S. 33-1902: rentals must be registered with the county assessor.
TPT license and lodging taxes
Every operator needs an Arizona Department of Revenue transaction privilege tax (TPT) license. Stays under 30 days are taxable. Online marketplaces like Airbnb collect and remit on their bookings, but owners still hold a license and report. ADOR short-term lodging
City of Sedona
- Annual $210 permit per advertised unit (main house and casita each need one). TPT license required first. Late fees of $50/$100 since Jan 1, 2026.
- $500K aggregate liability insurance; certified-mail or hand-delivered neighbor notice; posted safety and noise notice; permit number on every ad.
- Sex-offender background check on the booking guest 24 hours before check-in; keep records 12 months.
- No special events (weddings, retreats, workshops). Violations can bring suspension of up to one year.
- Combined lodging tax about 13.325% (Yavapai side) or 13.90% (Coconino side).
- Permits don't transfer with the deed. Newer detached ADUs face extra limits; check the city's ADU flowchart.
City of Sedona vacation rentals · City Code 5.25 · Our 2026 Sedona rules guide
Village of Oak Creek (VOC)
VOC is unincorporated Yavapai County, so county rules apply and there is no city permit. The big news: the Village of Oak Creek Association's 2017 ban on rentals under 30 days was declared unenforceable (announced April 18, 2026; written member statement May 6, 2026), following Kalway v. Calabria Ranch HOA (Arizona Supreme Court declined review April 2, 2024). Sub-HOAs such as Sedona Golf Resort, Pinon Woods, Firecliff, and Las Piedras may still restrict rentals. On July 22, 2026, the VOCA board tabled a monitoring program.
Read the full explainer · Sedona.biz report
Unincorporated Yavapai County (Cornville, Rimrock, Lake Montezuma, VOC)
Since January 1, 2017, Yavapai County has allowed short-term rentals in permitted habitable structures only: no RVs, tents, yurts, sheds, or events. Assessor registration and a TPT license are required. HOAs may add restrictions. Yavapai County planning FAQ
Cottonwood
Ordinance 731 (2023) requires annual city STR registration (expires December 31), assessor registration, a TPT license, a 24-hour emergency contact, neighbor notice, and proof of citizenship or legal residency on the form. Combined lodging tax is roughly 8 to 9%. Ordinance 731
Clarkdale
A town vacation rental license is required before renting or advertising (Town Code 8-9, amended through Ord. 439, June 2025). Town of Clarkdale
Jerome
Jerome is an incorporated town that licenses short-term rentals and applies zoning district rules. Confirm the current process directly with the Town of Jerome before you buy.
Camp Verde
Camp Verde is an incorporated town. Confirm current short-term rental, business license, and ADU requirements directly with the Town of Camp Verde before you buy or list. State TPT and county assessor registration always apply.
Flagstaff
An updated ordinance took effect July 1, 2026: a $250 annual license, $500K liability insurance, background checks, and fire safety requirements. City of Flagstaff
Arizona STR law tracker
- SB1076 would let towns under 70,000 people cap permits and set spacing rules. Status: not signed as of the latest reporting we reviewed.
- HB2429 (permit caps and spacing) passed the Arizona House 36–19 in March 2026. Status: not signed as of the latest reporting we reviewed. Arizona Capitol Times
- Sedona has pushed League of Arizona Cities & Towns resolutions to bar STRs in mobile-home parks and 5+ unit complexes, and to let voters decide on local STR regulation, possibly on the 2028 ballot. KNAU
STR rules FAQ
Can Arizona cities ban short-term rentals?
No. A.R.S. 9-500.38 prevents cities and towns from prohibiting short-term rentals or regulating them by classification, use, or occupancy. They can require permits (fee capped at $250), insurance, neighbor notice, and emergency contacts under A.R.S. 9-500.39.
Do I need a TPT license for an Airbnb in Arizona?
Yes. Every Arizona short-term rental operator needs a transaction privilege tax (TPT) license from the Arizona Department of Revenue. Airbnb collects and remits tax on its bookings, but you still hold the license and file returns.
Do I need to register my rental with the county?
Yes. Arizona requires residential rental property to be registered with the county assessor (A.R.S. 33-1902). Penalties can start at $1,000 plus $100 per month.
Thinking about an Airbnb in Sedona or the Verde Valley?
Book a free consult. We will talk through your budget, timeline, and goals, and give you a straight answer about whether a short-term rental here fits.