This guide covers STR rules for the City of Sedona only. Neighboring markets often confused with Sedona include:
- Village of Oak Creek: Unincorporated, governed by Yavapai County, not Sedona city rules.
- Cottonwood: Separate incorporated city with its own STR regulations.
- Clarkdale: Distinct town with different permitting and enforcement.
- Jerome: Historic town with unique STR restrictions and licensing.
Legality Verdict
Short-term rentals are explicitly legal in Sedona, with annual permits required and no license cap as of June 2026. Arizona law preempts local bans, but pending state legislation could allow future caps.
- Legality Status: 5/5
- License Availability: 5/5
- Compliance Cost (% revenue): 3/5
- Regulatory Stability: 3/5
- Enforcement Climate: 4/5
TL;DR
Sedona defines STRs as rentals under 30 days and requires a $200 annual city permit per unit. The total effective lodging tax is 13.3–13.9% depending on county. No occupancy or density caps exist, but operational restrictions apply. The biggest investor risk: pending state legislation could allow Sedona to cap STR licenses or impose minimum distances between rentals in the future.
Quick Facts
| Item | Detail |
|---|---|
| STR Definition | Rental of a dwelling unit for less than 30 days City of Sedona |
| Registration Required | Yes, annual city permit required City of Sedona |
| Permit Cost | $200 per unit, per year AZ Desert Vacations |
| Annual Renewal | Yes, annual renewal required City of Sedona |
| Late Penalty | $50 (1–90 days late), $100 (over 90 days late), one-time fee CitizenPortal.ai |
| State Sales Tax | 5.5% Transaction Privilege Tax Airbnb Help Center |
| Local Accommodations Tax | 3.5% city bed tax Arizona Department of Revenue |
| County/District Tax | 6.325% (Yavapai), 6.9% (Coconino) Sedona Community Involvement |
| Total Effective Lodging Tax | 13.325% (Yavapai), 13.9% (Coconino) Sedona Community Involvement |
| TPT License Required | Yes, $12/year Arizona Department of Revenue |
| Occupancy Cap | Not codified — no city or state occupancy cap Sedona City Code |
| Parking Requirement | Not codified — no separate city rule on parking Sedona City Code |
| Primary Regulator | City of Sedona Community Development City of Sedona |
| License Cap | No cap as of June 2026 Sedona City Code |
| Permitted Zones | All residential zones, subject to city code Sedona City Code |
| Prohibited Uses | No events, weddings, or nonresidential uses Sedona City Code |
| HOA/Condo Override | Not codified — private covenants may restrict STRs Sedona City Code |
| Local Contact Requirement | Yes, emergency contact info required Rent Responsibly |
| Inspection Requirement | Not codified — no separate city rule Sedona City Code |
| Density Limits | Not codified — state law prohibits city caps Sedona Short-Term Rentals FAQ |
| Primary Residence Rule | Not codified, except for new ADUs after 9/14/2024 Sedona City Code |
| Transferability | Not transferable to new owners AZ Desert Vacations |
| Enforcement Penalties | Permit suspension for code violations; late fees CitizenPortal.ai |
| Last Updated | June 11, 2026 |
Regulatory Impact Snapshot
Underwriters should model compliance costs at 13.5% of gross revenue, with median Sedona, AZ STRs earning $49,838 at an average daily rate of $313 and 50% occupancy. The compliance stack includes a $200 annual city permit, $12 TPT license, and a total lodging tax of 13.325%–13.9% depending on county. The binding constraint is the high tax stack, which is among the highest in Arizona. Pending state legislation could introduce a license cap or minimum distance rule, which would materially impact future supply and asset values. Run this market in our Airbnb Calculator →
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Frequently Asked Questions
Basics
What is considered a short-term rental in Sedona?
A short-term rental is any dwelling rented for less than 30 days at a time within Sedona city limits. City of Sedona
Are short-term rentals legal in Sedona?
Yes, STRs are explicitly legal and protected by Arizona state law, which preempts local bans. City of Sedona
Do Sedona STR rules apply in Village of Oak Creek or Cottonwood?
No, those areas are separate jurisdictions with their own rules. City of Sedona
Licensing
Is a permit required to operate an STR in Sedona?
Yes, an annual city permit is required for each STR unit. City of Sedona
How much does the Sedona STR permit cost?
The annual permit fee is $200 per unit. AZ Desert Vacations
Is there a cap on the number of STR permits in Sedona?
No, there is currently no cap on STR permits. Sedona City Code
Is a standard business license required for STRs?
No, STRs do not require a standard city business license, only the STR permit and TPT license. City of Sedona
Taxes
What taxes apply to Sedona STRs?
STRs pay a combined lodging tax of 13.325% (Yavapai) or 13.9% (Coconino), plus a $12 annual TPT license. Sedona Community Involvement
Does Airbnb collect and remit Sedona taxes?
Yes, Airbnb and similar platforms collect and remit state, county, and city taxes for Sedona STRs. Airbnb Help Center
Do I need to collect taxes for direct bookings?
Yes, hosts must collect and remit all applicable taxes for direct bookings. Arizona Department of Revenue
Operations
Are there occupancy or parking limits for Sedona STRs?
No separate city rules on occupancy or parking are codified for STRs. Sedona City Code
Can I host events or weddings at my Sedona STR?
No, events, weddings, and nonresidential uses are prohibited at STRs. Sedona City Code
Is a local contact required?
Yes, owners must provide emergency contact information to the city. Rent Responsibly
Do HOA or condo rules override city STR rules?
Yes, private covenants may prohibit STRs even if city law allows them. Sedona City Code
Enforcement
What happens if I operate without a permit?
Operating without a permit can result in permit suspension and civil penalties. CitizenPortal.ai
What are the late fees for permit renewal?
$50 for renewals 1–90 days late, $100 for over 90 days late, one-time fee. CitizenPortal.ai
Can Sedona suspend my STR permit?
Yes, for code violations or noncompliance, the city may suspend permits. CitizenPortal.ai
Is there pending legislation that could affect Sedona STRs?
Yes, state bills could allow Sedona to cap STR licenses or set minimum distances in the future. Arizona State Law Journal
Permit Process
All Sedona STRs must obtain an annual city permit before advertising or renting. The permit costs $200 per unit and is not transferable. Owners must also secure a $12/year Arizona TPT license before applying for the city permit. Commercially zoned properties and hotels require a business license instead of an STR permit. City of Sedona
Zoning
Sedona applies its Land Development Code to STRs as it does to other residential properties. STRs are allowed in all residential zones, but nonresidential uses—such as events, weddings, or retail—are strictly prohibited. There are no city-imposed occupancy, parking, or density caps for STRs. Sedona City Code
Taxes and Remittance
Sedona STRs are subject to a combined lodging tax of 13.325% (Yavapai) or 13.9% (Coconino), including state, county, and city bed taxes. Airbnb and similar platforms collect and remit these taxes automatically. For direct bookings, hosts must collect and remit all taxes and maintain a valid TPT license. Sedona Community Involvement
Enforcement and Recent Actions
Sedona enforces STR rules through permit requirements, late fees, and the authority to suspend permits for code violations. In 2025, the city clarified its enforcement posture, adding a one-time late fee structure and explicit suspension authority for noncompliance. CitizenPortal.ai
Recent Changes and Pending Legislation
A 2025 appellate court decision reaffirmed that Sedona cannot ban STRs, even in mobile home parks, due to state preemption. However, as of early 2026, state lawmakers are considering bills that would allow Sedona to cap STR licenses and set minimum distances between rentals. No such law is in effect yet, but this is the primary regulatory risk for investors. Arizona State Law Journal
Comparable Markets
- Scottsdale, AZ — Consider if you want a large, high-demand Arizona market with similar state preemption.
- Flagstaff, AZ — Consider for a northern Arizona market with university-driven demand and similar tax stack.
- Prescott, AZ — Consider for a smaller city with active STR licensing and enforcement.
- Phoenix, AZ — Consider for a major metro with robust STR supply and state-level protections.
Sources
- City of Sedona – Short-Term Rentals FAQ: https://www.sedonaaz.gov/your-government/departments/community-development/vacation-rentals/vacation-rentals-faqs
- City of Sedona: https://www.sedonaaz.gov/Home/Components/News/News/5787/473
- Sedona City Code Chapter 5.25: https://sedona.municipal.codes/SCC/5.25
- Sedona City Code 5.25.050: https://sedona.municipal.codes/SCC/5.25.050
- Arizona Department of Revenue – Sedona Transaction Privilege Tax & Use Tax Rates: https://azdor.gov/model-city-tax-code/city-profile/sedona
- Sedona Community Involvement (City Domain): https://sedonanewsreport.com/what-is-a-purpose-of-a-bed-tax/
- Arizona Department of Revenue – Short-Term Lodging: https://azdor.gov/business/transaction-privilege-tax/short-term-lodging
- Rent Responsibly: https://www.rentresponsibly.org/az/sedona/
- CitizenPortal.ai: https://citizenportal.ai/articles/5944639/Sedona/Yavapai-County/Arizona/Sedona-council-unanimously-approves-short-term-rental-code-changes-to-add-permit-suspensions-and-a-late-fee-structure
- Arizona State Law Journal: https://arizonastatelawjournal.org/2026/02/15/proposed-change-in-arizonas-vacation-rental-regulation/
- Arizona Capitol Times: http://azcapitoltimes.com/news/2025/11/28/short-term-rental-regulation-rejected-for-sedona-mobile-home-parks/
- AZ Desert Vacations: https://azdesertvacations.com/state-city-short-term-rental-regulations/
- Airbnb Help Center: https://www.airbnb.com/help/article/2295
- Central Arizona Association of Realtors: https://caaraz.com/short-term-rentals-in-arizona-where-state-law-ends-and-ccrs-begin/
- Awning.com: https://awning.com/post/arizona-short-term-rental-laws
- HomeTeam Luxury Rentals: https://hometeamluxuryrentals.com/blog/arizona-airbnb-short-term-rental-laws
- Martin De Bokay: https://martindebokay.com/blog/sedona-shortterm-rental-rules-explained
- Avalara MyLodgeTax: https://www.avalara.com/mylodgetax/en/resources/vacation-rental-tax-guides/arizona.html
This page is research, not legal advice. Consult local counsel before acquiring or operating a short-term rental in City of Sedona, Arizona (Yavapai & Coconino counties), State of Arizona.
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