Prescott Short-Term Rental Regulations

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Permit & Licensing

Vacation Rental Registration (City of Prescott)

This permit type does not require primary residence.

Arizona Transaction Privilege Tax License only

The property must be your primary residence. This means investment properties are not eligible for this permit type.

Application Process

Obtain Arizona TPT license first, then apply online via the Permit Portal (prescottpermits.com); a City safety inspection must be passed before the registration certificate is issued

Note: Document requirements vary by permit type. See individual permit sections above for eligibility details.

Tax Obligations

Combined rate: 12.275% of gross rental income.

Collection: Marketplace bookings: the online lodging marketplace collects and remits the tax (owner deducts that income using deduction code 775); direct bookings: the owner self-collects and remits

Filing: Filed electronically with the Arizona Department of Revenue via AZTaxes.gov; a $0 TPT return must be filed even for periods with no rental income

Rental Limits

Prescott does not impose an annual cap on the number of nights you can rent.

Occupancy & Density Limits

Max 2 persons (13 years and older) per bedroom, plus 2 additional persons per unit (e.g., 3-bedroom = 8 people)

Zoning & Restrictions

Permitted in single-family and multifamily residential zones per the City's Land Development Code and Zoning Map

Insurance & Safety

Insurance

Prescott does not require short-term rental operators to carry specific insurance. Standard homeowner policies often exclude short-term rental activity, so many hosts obtain dedicated short-term rental or landlord liability coverage. No liability insurance coverage amount is required — Prescott City Code Chapter 4-9 imposes no insurance requirement on vacation rentals.

Safety & Operating Requirements

• One-time City safety inspection must be passed before the registration certificate is issued ($65 safety inspection fee)
• Owner must ensure the unit complies with all applicable fire, building, health and safety codes

Penalties for Non-Compliance

Each day of violation is a misdemeanor punishable under Title 1, Chapter 3; upon the third or subsequent violation within a 12-month period, the City may suspend or revoke the vacation rental registration certificate

Platform Requirements

• Online lodging marketplaces (Airbnb, VRBO, HomeAway) must register with Arizona DOR and collect/remit tax on bookings
• The TPT license number must appear on any advertising for the short-term rental

Compliance Checklist

Follow these steps to legally operate a short-term rental in Prescott:

1. Determine your permit type. Prescott has 2 permit types. Identify which applies to your property (Vacation Rental Registration (City of Prescott), Arizona Transaction Privilege Tax License only).
2. Meet safety requirements. One-time City safety inspection must be passed before the registration certificate is issued ($65 safety inspection fee). Owner must ensure the unit complies with all applicable fire, building, health and safety codes.
3. Apply for your STR permit. Submit application + $95 fee. See permit types above to determine which applies.
4. Register for tax accounts. Set up lodging tax accounts with Arizona Department of Revenue.
5. Display your permit number. Include your permit/license number in all listings and advertisements.
6. Collect and remit taxes. 12.275% on all bookings.
7. Renew annually. $30 renewal fee.

Frequently Asked Questions

Do you need a permit to run an Airbnb in Prescott?

Yes. Prescott requires a short-term rental permit to operate an Airbnb or Vrbo, and there are 2 permit types — one requires the property to be your primary residence, and another allows non-owner-occupied (investment) use. See the permit types above to find which applies to your property.

How much does a short-term rental permit cost in Prescott?

A short-term rental permit in Prescott costs $95.

Does Prescott require a short-term rental to be your primary residence?

It depends on the permit type. At least one Prescott permit requires the property to be your primary residence, while another allows non-owner-occupied (investment) use — see the permit types above.

How many days a year can you short-term rent in Prescott?

Prescott does not cap the number of nights per year you can short-term rent, though permitting, zoning, and occupancy rules still apply.

What taxes do you pay on a short-term rental in Prescott?

Short-term rental stays in Prescott are subject to a combined 12.275% in lodging taxes. This combines 2.95% City Transaction Privilege Tax + 3% City Transient Occupancy (Bed) Tax + 6.325% State Transaction Privilege Tax. Hosts are legally responsible; many booking platforms collect and remit them automatically on the host's behalf.

What are the penalties for short-term rental violations in Prescott?

Penalties run up to $2,500.