Tempe Short Term Rental Regulation: A Guide For Airbnb Hosts

Do you own a place in Tempe, Arizona and you're weighing whether to put it on Airbnb or Vrbo? Well, the good news is that yes, you can. Arizona law protects that right statewide under A.R.S. § 9-500.39, and no city in Maricopa County, Tempe included, is allowed to ban short-term rentals outright.

The catch is that Tempe doesn't make it easy. Since Ordinance No. O2023.01 took effect on March 6, 2023, every short-term rental in the city needs its own annual license, $250 a property, on top of a state tax license, $500,000 in liability coverage, a sex offender background check before every stay, and a written notice to your neighbors once you're approved. Skip the license and the city can fine you up to $1,000 a month, and Tempe's Tax & License office runs monitoring software that scans Airbnb and Vrbo listings looking for operators who haven't bothered.

So this guide walks through what actually applies in 2026: the license and what it costs, the documents you'll need, the three tax layers stacked on top of every stay, and how hard Tempe really enforces all of it. Every figure below comes from the city's own pages and the ordinance itself, checked in July 2026. Assuming Tempe pencils out against other Arizona markets you're considering, run the property through BNBCalc before you commit to anything.

What are short term rental (Airbnb, VRBO) regulations in Tempe, Arizona?

That research starts with the framework itself, because two layers of law stack on top of each other here: state and city.

The state layer sits underneath everything. A.R.S. § 9-500.39, enacted in 2016 and amended since, bars a city or town from prohibiting short-term rentals or regulating them by classification, use or occupancy, except for a short list of carve-outs: safety-focused ordinances, a capped permit fee, insurance minimums, an emergency-contact requirement, and a defined penalty ladder. Tempe built its entire ordinance inside that narrow lane, which is worth keeping in mind whenever a rule here seems unusually specific. It almost certainly traces back to one of those carve-outs rather than to something Tempe invented on its own.

The city layer is Ordinance No. O2023.01, which added a new article to Chapter 16A of the Tempe City Code and took effect March 6, 2023. It defines a short-term rental as any property rented for 29 days or less, and that definition sweeps in more than just spare bedrooms. Single-family homes, guest houses, apartments, condominiums, individual rooms for rent, and corporate housing all count, according to Tempe's short-term rental license page. Every one of those is also subject to transaction privilege tax the same way a hotel room is.

Notice what's missing from that list: zoning. Because the state statute forbids regulating short-term rentals "by classification, use or occupancy," Tempe treats this as a licensing question rather than a zoning one. There's no separate STR zoning district and no neighborhood-by-neighborhood ban. If a home is already legal to live in, it's legal to rent short-term, provided the owner clears the license and its requirements.

Starting a Short Term Rental Business in Tempe

That licensing-not-zoning approach is exactly why Tempe's rules read as strict as they do: the city leaned hard into the parts of the ordinance it was allowed to control.

The timing behind that decision is worth knowing, because it explains the tone of the whole ordinance. Tempe was already drafting stricter short-term rental rules, made possible by a 2022 state law change that expanded local oversight beyond bare registration, when a house party at an Airbnb near University and Hardy drives ended in gunfire. Nobody was hurt, but police documented more than 60 shell casings at the scene, and two people were arrested on unrelated charges. That incident didn't start Tempe's process, but it clearly shaped it. The draft ordinance already on the table gained neighbor notification, an emergency-contact response window, and a background check on every booking, and the council pushed it through public meetings that November before adopting it on January 5, 2023.

Council Member Doreen Garlid summed up the reasoning at that meeting. A short-term rental could sit right next door with four kids in the house, "you're inviting strangers into my neighborhood," she said, and that framing carried through the entire ordinance. The city wasn't legislating in a vacuum, either. The Tempe Tourism Office told the council that nearly 4 million visitors come through the city every year, and a third-party count found 1,206 active short-term rental listings as of December 2022, right before the new rules took hold.

For most owners, starting the business itself doesn't require living on site or forming any special entity. There's no general owner-occupancy rule, and companies, trusts and individual owners can all hold a license. The one exception is accessory dwelling units. If your ADU's certificate of occupancy was issued on or after December 20, 2024, Tempe requires the owner to live in the main house while that ADU operates as a licensed short-term rental, under Tempe City Code Section 16A-213(k). ADUs built before that date aren't subject to it.

Do check who's actually going to run the property, too, because the ordinance disqualifies an owner or designee who's a registered sex offender, has a felony conviction involving death or serious physical injury, or has a felony conviction for using a deadly weapon within the past five years. And once you're operating, you stay responsible for what your guests do: noise, parking, trash and the general upkeep of the property are all on you, not just on whoever's staying there. If you're planning any renovations before you list, keep in mind that some improvements need a building permit before work starts.

Short Term Rental Licensing Requirement in Tempe

Clear all of that, and the license itself is the last real hurdle before you can list the property.

Tempe's Tax & License division issues the license through the Accela Citizen Access portal, and you have to apply and get approved before you list or rent the unit at all, not after. Each unit needs its own separate license, application and payment, so a duplex or two condos in the same building means filing twice. The annual fee is $250 per property, non-refundable, and it drops to $187.50 if you're issued the license on or after July 1, since Tempe prorates for the second half of the year.

Once you submit a complete application, the city still has to issue or deny it within seven business days. That's a state-mandated ceiling, not a Tempe courtesy, since A.R.S. § 9-500.39 caps how long a city can sit on a short-term rental permit decision. The city can deny an application for a few specific reasons:

• Missing required information or an unpaid fee.
• False statements on the application.
• A disqualifying criminal record for the owner or designee.
• A currently suspended license tied to the same property.
• Three verified violations inside the trailing 12 months (not counting aesthetic, trash or parking violations on their own), or one violation serious enough to threaten public health and safety.

The license runs on the calendar year, and Tempe's own page tells owners to renew by December 31 to avoid penalties. Miss that window and you're operating unlicensed the moment the new year starts, which puts you straight back into the penalty structure covered later in this guide. Beyond the renewal date, a license can be suspended for up to 12 months if the city verifies three violations within a rolling 12-month period, or immediately for a single serious one. Do treat every complaint against the property as something that could cost you the license, not just a fine.

Required Documents for Tempe Short Term Rentals

None of that renewal math matters if you show up to apply for the license without the right documents already in hand.

Before you even open the application, Tempe wants four things ready:

• A Transaction Privilege Tax license number from AZTaxes.gov, since Tempe won't issue a rental license to a property that isn't already registered to collect tax.
• Proof of registration with the Maricopa County Assessor, a separate county-level step required under A.R.S. § 33-1902 for every residential rental in the county, short-term or not. If you own rental property elsewhere in the county too, the Maricopa County short-term rental guide covers what the assessor expects countywide.
• Proof of $500,000 in liability coverage, either your own policy or documentation that the platform you list on, Airbnb or Vrbo, provides equal or greater coverage automatically.
• The $250 license fee itself (or $187.50 for a July 1-or-later application), paid at submission.

Approval isn't the end of the paperwork, either. Once the city grants the license, you have to notify every adjacent, directly across, and diagonally across neighbor in writing, or every unit on the same floor if the property sits in a multi-family building. That notice needs to include your license number and your emergency contact's name, address, email and 24-hour phone number, and you're expected to email a copy to [email protected] for the city's own records. From there, you're on an ongoing hook too. Run a sex offender background check on the person booking the stay through the Department of Justice's public registry within 24 hours of every booking, unless the platform already does it for you, and keep that record for 12 months. Remember to post your license number on every advertisement as well, since an unlisted number is one of the easier violations for the city to catch.

Tempe Short Term Rental Taxes

Assuming you clear all that and are able to get the license approved, there's still tax to handle, and Tempe stacks three layers of it on top of every stay.

Charge	Rate	Collected by
City Hotel tax (business code 044)	1.8%	City of Tempe
City additional Hotel/Motel tax (business code 144)	5.0%	City of Tempe
State & Maricopa County Transient Lodging (business code 025)	7.27%	Arizona Department of Revenue
Total TPT	14.07%	Filed together via AZTaxes.gov

Those figures come directly from Tempe's own tax table, which cites A.R.S. § 42-5070 for the state and county piece. You file and pay all three through AZTaxes.gov, adding region codes TE for Tempe and MAR for the county alongside business codes 025, 044 and 144.

Here's the part that trips up a lot of new hosts: if Airbnb or Vrbo, both registered as online lodging marketplaces in Arizona, handles 100% of your bookings, you can deduct that income entirely using deduction code 775. But you still have to file a return, even if it comes out to $0, and you'll want Form 5018, the Online Lodging Operator Exemption Certificate, from the platform as proof the tax was actually collected on your behalf. Watch out for direct bookings, though, since any reservation that comes through your own website or a phone call bypasses the platform's collection entirely, and you're on the hook to remit tax on that portion yourself. The owner stays ultimately liable for all of it even if a property manager files the return.

Arizona wide Short Term Rental Rules

That liability, the kind that lands on the owner no matter who files the paperwork, traces back to a single state law that sits above every city ordinance in Arizona, Tempe's included.

A.R.S. § 9-500.39 is that law, and it's what makes Tempe's ordinance possible in the first place while also limiting how far the ordinance can go. A city can regulate short-term rentals for genuine public health and safety reasons, and it can enforce the same nuisance and maintenance rules it applies to every other property. It can also require a 24-hour emergency contact, a neighbor notice, and a license capped at $250 or actual cost, issued or denied within seven business days. What a city cannot do is ban short-term rentals outright, or regulate them based on the property's classification, use or occupancy, which is exactly the boundary Tempe's zoning approach respects.

Every Arizona operator also needs a state Transaction Privilege Tax license from the Arizona Department of Revenue, separate from any city license. That one costs $12 per business location, runs on the calendar year with no separate state renewal fee, and has to be renewed by the last business day of January.

The legislature has tried twice this session to reshape this framework and failed both times. HB 2429 would have let cities cap overnight occupancy and extended the violation-counting window for permit suspensions from 12 to 24 months; it passed the House 37-14 in March 2026 but never got a Senate hearing. SB 1076 would have let smaller cities, under 70,000 residents, cap the number of STR permits and set minimum distances between them, which wouldn't have applied to Tempe anyway given its population. From what I can tell going through the legislature's own bill tracker, neither had passed as of this writing, so § 9-500.39 stands unchanged. For the full statewide picture, including the state tax layers that apply everywhere in Arizona, see our Arizona short-term rental guide.

Does Tempe strictly enforce STR rules?

None of those stalled bills change what's already happening on the ground in Tempe, where enforcement leans more proactive than most Arizona cities.

Tempe's Tax & License division doesn't wait for a neighbor to complain before it acts. It runs monitoring software that scans Airbnb, Vrbo and similar sites, cross-references the listings against property owners and parcels, and tracks booking dates and revenue for every match it finds. Owners caught operating without a license don't just get a warning either; the city has said a new license issued after that kind of discovery may come with penalty fees attached on top of the standard fee.

The penalty ladder itself is steep by design. Operating without a license runs up to $1,000 a month, and skipping the emergency-contact requirement adds another $1,000 a month on top of that. Verified violations escalate fast inside a rolling 12-month window:

Violation (within 12 months)	Maximum penalty
First	$500, or one night's rent, whichever is greater
Second	$1,000, or two nights' rent, whichever is greater
Third and any after that	$3,500, or three nights' rent, whichever is greater

Three of those in a rolling year, or one serious enough on its own, can suspend the license for up to 12 months.

Complaints still matter, too, and they go through the Accela Citizen Access portal, no account required, and get forwarded to Code Enforcement or the Tempe Police. For nuisance parties specifically, the non-emergency police line is 480-350-8311, and Tempe's separate nuisance-party ordinance carries its own fines on top of anything the STR ordinance imposes: $250 for a first offense, $1,000 for a second, and $1,500 for a third. Between the data-driven monitoring and the complaint pipeline, an unlicensed or badly-run rental in Tempe has two separate ways to get caught, not just one.

How to Start a Short Term Rental Business in Tempe?

None of that has to touch you if you get the order of operations right from day one.

1. Confirm your property qualifies. Single-family homes, guest houses, apartments, condos, individual rooms and corporate housing are all eligible. If it's an ADU built on or after December 20, 2024, plan to live in the main house while you rent it short-term.
2. Get your state TPT license through AZTaxes.gov, adding region codes TE and MAR and business codes 025, 044 and 144.
3. Register with the Maricopa County Assessor under A.R.S. § 33-1902, separate from the city license.
4. Line up $500,000 in liability coverage, or confirm in writing that your listing platform provides equal or greater coverage automatically.
5. Apply for the Tempe Short-Term Rental License through the Accela portal and pay the $250 fee before you list or rent anything.
6. Wait for the seven-business-day review, and correct anything the city flags quickly, since an incomplete or false application is the fastest route to a denial.
7. Send your neighbor notification once approved, and email a copy to [email protected]. Post your license number on every advertisement the same week.
8. Set up your emergency-contact and background-check process before your first guest, including the 12-month record-keeping the ordinance requires.
9. Diarize December 31. That's your renewal deadline every year, and letting it lapse puts you back into the same penalty structure as an owner who never licensed the property at all.

Who to contact in Tempe about Short Term Rental Regulations and Zoning?

Whichever step trips you up, a short list of offices covers almost everything.

Licensing, taxes and appeals

Tempe Tax & License issues the STR license, handles renewals and appeals, and administers the city's share of TPT.

• Address: 20 E. 6th Street, 3rd Floor, Tempe, AZ 85281 (mailing: PO Box 5002, Tempe, AZ 85280)
• Phone: 480-350-2955
• Fax: 480-350-8659
• Email: [email protected]
• Hours: Monday-Friday, 8 a.m.-5 p.m., walk-ins until 4:30 p.m., closed city holidays
• Apply or check status: the Accela Citizen Access portal

Zoning, ADUs and planning questions

The Community Development Department, Planning Division handles zoning questions and the ADU owner-occupancy rule.

• Address: 31 E. Fifth Street, Garden Level East, Tempe, AZ 85281 (mailing: PO Box 5002, Tempe, AZ 85280)
• Phone: 480-350-4311
• Email: [email protected]
• Hours: Monday-Friday, 8 a.m.-5 p.m., closed on city-observed holidays

Complaints and nuisance parties

Short-term rental complaints route through the same Accela portal used for applications, and Code Enforcement or Tempe Police follow up from there.

• Nuisance parties (non-emergency police line): 480-350-8311
• File a complaint: the Accela Citizen Access portal, no login required

County registration

The Maricopa County Assessor's Office handles the separate rental-registration requirement under A.R.S. § 33-1902.

• Phone: 602-506-3406
• Online: the rental registration FAQ and parcel search at mcassessor.maricopa.gov

State tax

The Arizona Department of Revenue administers the state TPT license and the state and county portion of the tax stack.

• Online: AZTaxes.gov for registration, filing and payment
• Guidance: the department's short-term lodging page

What do Airbnb hosts in Tempe on Reddit and Bigger Pockets think about local regulations?

Contact information doesn't tell you what running one of these actually feels like day to day, so here's what the public record shows.

I checked BiggerPockets directly rather than relying on a search summary, and I couldn't find a dedicated thread about Tempe's short-term rental ordinance specifically. Reddit wasn't an option either, since it blocks the kind of automated access this research would need, and its own terms bar the commercial use this guide would represent. So rather than guess at sentiment I can't source, here's what's actually on the record.

Tempe's own public-meeting data is the closest thing to a survey that exists. Feedback collected in November 2022, before the ordinance passed, showed a majority of respondents supported the license fee, the liability insurance requirement, and civil penalties for operating unlicensed. That's not the same as investor sentiment, but it does tell you the ordinance wasn't imposed over public objection, and the residential-safety framing behind it (Council Member Garlid's comment about a rental with guests moving in next door to a family) still shapes how the city talks about enforcement today.

The general BiggerPockets discussion of Tempe skews toward long-term rentals near Arizona State University, where investors describe strong, fast-turning demand, rather than toward short-term rental strategy specifically. Take that as a sign the Tempe investor conversation online hasn't caught up to how detailed this ordinance actually is, not as evidence the rules are easy to work around. Watch out for older advice you find elsewhere, too, since anything written before March 2023 predates the license entirely and will understate what Tempe now requires. If you're weighing Tempe against a market with a simpler compliance load, BNBCalc Markets and our Tucson market page are a reasonable place to run the comparison before you commit capital to either one.

Frequently Asked Questions

Can you legally run an Airbnb in Tempe in 2026?

Yes. Arizona's preemption law prevents Tempe from banning short-term rentals outright, but the city requires an annual $250 license per property, a state Transaction Privilege Tax license, $500,000 in liability insurance, a sex offender background check before every stay, and written notice to your neighbors once you're approved. Single-family homes, condos, apartments, guest houses, individual rooms and corporate housing all qualify, with one exception: an accessory dwelling unit built on or after December 20, 2024 requires the owner to live in the main house while it's rented short-term.

How much does a Tempe short-term rental license cost?

The annual license fee is $250 per property, non-refundable, or $187.50 if the license is issued on or after July 1 of that year. The license runs on the calendar year, and Tempe expects renewal by December 31 to avoid falling into the same penalty structure as an unlicensed property. Each unit needs its own separate license and payment, so owning two rentals in the same building means paying and applying twice, not once.

What happens if you rent short-term in Tempe without a license?

Operating without a license carries a penalty of up to $1,000 a month, and failing to provide the required emergency contact adds another $1,000 a month on top of that. Tempe's Tax & License division actively runs monitoring software to identify unlicensed listings advertised on Airbnb, Vrbo and similar platforms, matching them against property owners and parcel records, so this isn't purely complaint-driven enforcement. A license issued after the city catches an unlicensed operator may also carry extra penalty fees.

Do you have to pay tax on a short-term rental in Tempe?

Yes. Tempe stacks three separate Transaction Privilege Tax layers on every stay: a 1.8% city hotel tax, a 5.0% additional city hotel/motel tax, and a combined 7.27% state and Maricopa County transient lodging tax, for a total of 14.07%. You file and pay all three through AZTaxes.gov. If Airbnb or Vrbo collects 100% of your bookings, you can deduct that income using deduction code 775, but you still have to file a return, even one that comes out to $0.

Can Tempe ban short-term rentals outright?

No. Arizona's A.R.S. § 9-500.39 specifically prohibits any city or town, Tempe included, from banning short-term rentals or regulating them based on a property's classification, use or occupancy. What Tempe can do, and has done, is require a license, cap it at $250 or actual cost, mandate insurance and an emergency contact, and impose fines and suspensions for violations. Two attempts to change this framework in the 2026 legislative session, HB 2429 and SB 1076, both stalled without becoming law.

Last verified: July 2026. Every ordinance, tax rate, state law, and contact detail in this guide links to or comes from its official source.