Pima County, Arizona Short-Term Rental Regulation: A Guide For Airbnb Hosts

Starting a Short-Term Rental Business in Pima County

To operate a short-term rental (Airbnb, VRBO, etc.) in Pima County, Arizona, there are a few key requirements:

• All short-term rental owners in Arizona must obtain a Transaction Privilege Tax (TPT) license from the Arizona Department of Revenue in order to collect and remit taxes. Be sure to list your city as a region code on the license.
• If your rental is located in the city of Tucson, you will also need to obtain a business license from the city. Tucson does not have any additional short-term rental-specific permits or licenses beyond the state TPT requirement.
• Register your short-term rental property with the Pima County Assessor's Office using the Arizona Residential Rental Property form, as required for all residential rental properties in the county.
• Collect and remit the applicable taxes on your rental income, including state, county, and city taxes. In Tucson, the combined lodging tax rate is 12.05% plus a $2 per night per bed fee.

While Arizona state law prohibits cities and counties from banning short-term rentals outright, local jurisdictions can implement some regulations. However, Pima County and Tucson currently do not have any major restrictions on short-term rentals beyond the tax and registration requirements.

This makes Pima County an attractive location to start an Airbnb or VRBO, as the barriers to entry are relatively low compared to some other markets with more stringent regulations. The lack of a specific short-term rental permit and the ability to operate non-owner occupied rentals provides good opportunities for investors.

Before starting your short-term rental business, be sure to review any applicable HOA or condo association rules, as well as best practices for being a good neighbor and host. With the proper licenses, registration, and tax compliance, you can successfully launch an Airbnb in Pima County.

Short-Term Rental Licensing Requirements in Pima County

To legally operate a short-term rental (STR) in Pima County, owners must meet the following requirements:

1. Register the rental property with the Pima County Assessor's Office by submitting the Arizona Residential Rental Property form. This is required for all residential rental properties in the county, including vacation and short-term rentals.
2. Obtain a Transaction Privilege Tax (TPT) license from the Arizona Department of Revenue to collect and remit applicable taxes. Be sure to list your city as a region code on the license.
3. If the rental is located in the city of Tucson, also obtain a business license from the city. The initial cost is $95 ($25 one-time fee plus $70 annual renewal).
4. Provide the name, address, and telephone number of the owner's designees, if any.
5. Provide the full name, address, and 24-hour telephone number of the emergency point of contact.
6. Provide proof of a valid TPT license.
7. Acknowledge agreement to comply with all applicable laws, regulations, and ordinances.
8. Attest compliance with the notification requirements.
9. Provide evidence of liability insurance covering at least $500,000 in the aggregate or evidence that each rental transaction is provided through a platform with equal or greater coverage.
10. The completed forms and documentation should be submitted to the Pima County Assessor's Office at 240 N. Stone Avenue, Tucson, AZ 85701. Contact their office at 520-724-8630 with any questions.

It is illegal to rent the property before registering with the Assessor's Office. Failure to properly register or obtain required licenses can result in the STR being ordered to cease operations. The city or town may also impose civil penalties of up to $1,000 per month against the owner for non-compliance, in addition to any other fines.

The licensing process timeline varies but generally takes a few weeks, so it's important to begin well in advance of when you plan to start renting. Once licensed, STR operators must collect and remit the applicable taxes, which total 12.05% in Tucson plus a $2 per night per bed fee.

Required Documents for Pima County Short-Term Rentals

To legally operate a short-term rental in Pima County, owners must submit the following documents:

1. Arizona Residential Rental Property Form: This form must be filed with the Pima County Assessor's Office for all residential rental properties, including short-term and vacation rentals, prior to being occupied. It provides key information about the rental property and owner.
2. Transaction Privilege Tax (TPT) License: All short-term rental owners in Arizona must obtain a TPT license from the Arizona Department of Revenue in order to collect and remit applicable taxes. Be sure to list your city as a region code on the license.
3. Proof of Liability Insurance: Short-term rental owners must provide evidence of liability insurance covering at least $500,000 in the aggregate or evidence that each rental transaction is provided through a platform with equal or greater coverage.
4. Neighbor Notification: Owners are required to attest compliance with notification requirements, which involve informing neighbors of the intent to use the property as a short-term rental.
5. Emergency Contact Information: Provide the full name, address, and 24-hour telephone number of the individual who will serve as the emergency point of contact for the rental property.
6. Owner Designee Information: If applicable, submit the name, address, and telephone number of each designee of the owner.
7. Acknowledgement of Compliance: Owners must acknowledge their agreement to comply with all applicable laws, regulations, and ordinances, including the requirement that the owner and designees are not registered sex offenders or convicted of certain felonies within the past five years.

These completed documents should be submitted to the Pima County Assessor's Office at 240 N. Stone Avenue, Tucson, AZ 85701. Failure to properly register or obtain required documents can result in the short-term rental being ordered to cease operations, along with potential fines and penalties.

Pima County Short-Term Rental Taxes

Short-term rental owners in Pima County are subject to several state and local taxes:

1. State Transaction Privilege Tax (TPT): Arizona levies a 5.5% TPT on short-term rental income, which is reported under business code 025 for transient lodging. This applies to stays of less than 30 days.
2. Pima County TPT: An additional 6.1% TPT is imposed by Pima County on transient lodging, for a total combined state and county rate of 11.6%.
3. City of Tucson Taxes: For rentals located within the city of Tucson, there is an additional 6% occupancy tax plus a $2 per night bed tax. When combined with the state and county TPT, the total tax rate on short-term rentals in Tucson is 17.6% plus $2 per night.

Short-term rental operators are responsible for collecting these taxes from guests and remitting the tax to the appropriate authorities, typically on a monthly or quarterly basis depending on revenue.

Taxes must be collected on the full rental amount, including any cleaning fees. Only rentals of 30 days or more are exempt from the transient lodging taxes.

Deductions and Write-Offs

While short-term rental income is subject to TPT and occupancy taxes, owners can deduct certain expenses to reduce their taxable income for income tax purposes:

1. Mortgage interest
2. Property taxes
3. Utilities
4. Insurance
5. Cleaning and maintenance costs
6. Repairs
7. Supplies
8. Depreciation on furniture and equipment

Keeping detailed records of these expenses is important for maximizing deductions. Short-term rental owners should consult with a tax professional to ensure proper reporting and compliance with all applicable tax laws.

By understanding the tax obligations and strategically utilizing deductions, Pima County Airbnb operators can run a profitable rental business while staying on the right side of state and local tax requirements.

Arizona Wide Short-Term Rental Rules

Arizona has enacted statewide legislation that impacts short-term rental operators in Pima County. Under state law, cities and counties cannot prohibit vacation rentals outright, but they are allowed to implement reasonable regulations.

All short-term rental owners in Pima County must register their property with the Pima County Assessor's Office using the Arizona Residential Rental Property form prior to renting. This is required for all residential rentals in the county.

Hosts are also required to obtain a Transaction Privilege Tax (TPT) license from the Arizona Department of Revenue in order to collect and remit applicable state and county taxes. The combined tax rate in Pima County is 11.6%. In the city of Tucson, short-term rentals are subject to an additional 6% city tax plus a $2 per night per bed fee, for a total tax rate of 17.6% plus the nightly fee.

Short-term rental operators must maintain at least $500,000 in liability insurance, either through their own policy or via coverage provided by their rental platform. They are also required to provide contact information for the owner or their designee, as well as a 24-hour emergency contact number.

Owners must attest that they will comply with all relevant state and local laws and ordinances. This includes certifying that neither the owner nor any designees are registered sex offenders or have been convicted of certain felonies within the past five years.

In 2022, the Arizona legislature passed Senate Bill 1168, which allows cities and towns to implement additional regulations on short-term rentals, such as requiring permits, setting occupancy limits, and imposing fines for violations. However, the law still prohibits municipalities from banning short-term rentals altogether.

Currently, the city of Tucson has not enacted any major short-term rental regulations beyond what is required by state law. However, Pima County hosts should stay informed of any potential changes at both the state and local level that may affect their short-term rental business.

Does Pima County Strictly Enforce STR Rules?

Based on discussions from Airbnb hosts on forums like BiggerPockets and Reddit, Pima County appears to be relatively Airbnb-friendly compared to many other major cities and counties. Arizona has some of the most lenient statewide short-term rental laws in the country, which limits the ability of cities and counties to heavily regulate Airbnbs.

Pima County and its largest city Tucson currently do not have any major restrictions on short-term rentals beyond the basic registration, tax collection, and insurance requirements mandated by state law. Hosts are not reporting strict enforcement or punitive measures from the county.

In fact, the lack of a specific short-term rental permit and the ability to operate non-owner occupied rentals makes Pima County an attractive market for Airbnb investors. One Tucson Airbnb host on BiggerPockets described the different areas of the metro as all being viable for short-term rentals, with plenty of unique advantages in each part of town.

While there are thousands of active short-term rental listings across Pima County, there is little evidence that a significant number of hosts are operating under the radar outside of the rules. The county's light-touch approach to regulation and enforcement, especially compared to other large metros that have cracked down on Airbnbs, makes it unnecessary for most hosts to skirt the law.

So in summary, Pima County is very Airbnb-friendly from a regulatory perspective. The county appears to be taking a hands-off approach to enforcement as long as hosts are properly registered, insured, and paying their taxes. This balanced strategy is enabling the short-term rental market to thrive in Tucson and the surrounding county.

How to Start a Short-Term Rental Business in Pima County

Starting a short-term rental business in Pima County can be a lucrative venture. Here are the key steps to get your Airbnb or VRBO up and running:

1. Research local regulations: Before getting started, thoroughly review Pima County's short-term rental rules. While Arizona state law prevents counties from banning STRs outright, it's important to understand any registration, tax collection, and insurance requirements. Consult the Pima County government website and reach out to their offices with any questions.
2. Register your business: Apply for a Transaction Privilege Tax (TPT) license with the Arizona Department of Revenue. This allows you to collect and remit the required taxes on your rental income. Be sure to list Pima County as a region code on your license. If your rental is located in the city of Tucson, you'll also need to obtain a business license from the city for a fee of $95 initially and $70 annually.
3. Register your property: File the Arizona Residential Rental Property form with the Pima County Assessor's Office. This step is required for all residential rentals in the county, including short-term and vacation rentals. The form provides key details about your property and ownership.
4. Obtain insurance: Short-term rental owners in Pima County must provide proof of liability insurance covering a minimum of $500,000 in aggregate. Alternatively, you can show evidence that each booking is made through a platform like Airbnb that provides equal or greater insurance coverage.
5. Prepare your property: Outfit your rental with the necessary furniture, linens, kitchenware, and amenities to create an inviting space for guests. Consider any upgrades or repairs needed to meet STR regulations and attract bookings. Professionally photograph your property to entice potential guests.
6. Create your listing: Once your property is ready and properly registered, create a listing on popular short-term rental platforms like Airbnb and VRBO. Craft an appealing description, set a competitive nightly rate, and establish your booking settings and house rules.
7. Manage your bookings: As reservations start coming in, have a system in place to efficiently handle guest communication, check-ins, turnovers, and cleaning between stays. Consider using vacation rental software to automate processes and save time.
8. Pay your taxes: Collect the applicable 12.05% lodging tax on your Pima County bookings plus the $2 per night bed tax in Tucson. Remit the taxes to state and local authorities as required, typically on a monthly or quarterly basis. Maintain organized records of your rental income and expenses.

By following these steps and staying compliant with Pima County's straightforward short-term rental regulations, you can launch a successful Airbnb business. The county's hands-off approach and lack of permitting make it an appealing place to invest in vacation rentals.

Who to Contact in Pima County about Short-Term Rental Regulations and Zoning?

For questions about short-term rental regulations and zoning in Pima County, here are the key contacts and resources:

1. Pima County Assessor's Office: Contact them at 520-724-8630 or visit their office at 240 N. Stone Avenue, Tucson, AZ 85701 for information on registering your short-term rental property with the county as required by state law.
2. Pima County Development Services: Call 520-724-9000 or visit them at 201 N Stone Ave, Tucson, AZ 85701 for zoning and land use questions. They can help determine if your property is eligible to operate as a short-term rental based on its zoning.
3. Town of Oro Valley: If your rental is located in Oro Valley, contact their Community and Economic Development Department at 520-229-4800 for any questions about local vacation rental requirements. You can also visit their short-term rental information page at https://www.orovalleyaz.gov/Government/Departments/Community-and-Economic-Development/Short-Term-Rental-and-Vacation-Rental-Regulations
4. Arizona Department of Revenue: Visit their website at https://azdor.gov/transaction-privilege-tax/residential-rental-guidelines or call 602-255-3381 for information on obtaining your required Transaction Privilege Tax (TPT) license to operate a short-term rental in Arizona.

In addition to government resources, connecting with other local short-term rental hosts can be very helpful for navigating regulations and getting area-specific advice. Here are a few online communities to check out:

1. BiggerPockets Tucson/Arizona Forums: https://www.biggerpockets.com/forums/530/topics/1087982-who-else-is-doing-mid-term-rentals-in-tucson-az - Network with other Tucson short-term rental operators on this popular real estate investing forum.
2. Tucson Subreddit: https://www.reddit.com/r/Tucson/ - Check out the Tucson subreddit to ask questions and get input from locals knowledgeable about the short-term rental scene.
3. Airbnb Community Center: https://community.withairbnb.com/t5/Ask-about-your-listing/Looking-for-a-Recomended-Co-Host-in-Tucson-AZ/td-p/1391191 - The official Airbnb forums are a great place to connect with other hosts in the Tucson/Pima County area for support and advice.

By utilizing these government and community resources, you'll be well-equipped to successfully navigate the regulatory landscape and launch your Pima County short-term rental business. The county's straightforward requirements and helpful contacts make it an appealing place for Airbnb operators.

What Do Airbnb Hosts in Pima County on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions from Airbnb hosts on Reddit and BiggerPockets, here are some key takeaways about short-term rental regulations in Pima County:

1. Most hosts feel Pima County and Tucson are relatively Airbnb-friendly compared to other major cities. Arizona has some of the most lenient statewide short-term rental laws, which limits how much cities and counties can regulate.
2. Hosts appreciate that Pima County does not require a specific short-term rental permit beyond registering with the assessor and obtaining a state tax license. The lack of additional permitting makes it easy to get started compared to markets with more red tape.
3. Some hosts mention the county's light-touch approach to enforcement. As long as properties are properly registered, insured and paying taxes, the county doesn't seem to be cracking down harshly on Airbnbs.
4. Tucson Airbnb operators report strong demand and bookings, especially during peak events like the gem show. Hosts can charge premium rates during high season. One host reported being "amazed at how well it works" after getting immediate bookings.
5. However, some locals express concerns about the proliferation of Airbnbs depleting the housing supply and driving up rents for long-term residents. In smaller towns around Tucson, there are worries STRs are forcing out older residents on fixed incomes.
6. Despite some community opposition, there appears to be little political appetite for a crackdown in Pima County. Statewide, Arizona's governor is a vocal supporter of short-term rentals as part of the "sharing economy".

So in summary, Pima County Airbnb hosts on forums like Reddit and BiggerPockets generally feel positively about the regulatory environment. The county's hands-off approach, lack of permitting and strong tourist demand make it an appealing place to operate short-term rentals, even if some residents are pushing back on the impacts.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.