Prescott Short-Term Rental Regulations
| Permit | ✓ Required — Vacation Rental Registration (City of Prescott) ($95) — See below for other permit types |
| Primary Residence | Not required |
| Annual Day Limit | No limit |
| Tax Rate | 12.275% |
| Max Penalty | $2,500 per violation |
| Insurance | Not required |
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Permit & Licensing
- Vacation Rental Registration (City of Prescott) — No primary residence requirement ($95 initial, $30 renewal)
- Arizona Transaction Privilege Tax License only — No primary residence requirement (No City permit fee — owner-occupied rentals are exempt from City of Prescott vacation rental registration (only a state TPT license is required) initial, No City renewal fee — owner-occupied rentals require no City registration certificate, so there is no annual renewal renewal)
Vacation Rental Registration (City of Prescott)
| Fee | Amount |
|---|---|
| Initial cost | $95 |
| Renewal | $30 / 1 year |
This permit type does not require primary residence.
Arizona Transaction Privilege Tax License only
| Fee | Amount |
|---|---|
| Initial cost | No City permit fee — owner-occupied rentals are exempt from City of Prescott vacation rental registration (only a state TPT license is required) |
| Renewal | No City renewal fee — owner-occupied rentals require no City registration certificate, so there is no annual renewal |
This permit type does not require primary residence.
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
| Tax | Rate | Authority |
|---|---|---|
| City Transaction Privilege Tax | 2.95% | City of Prescott |
| City Transient Occupancy (Bed) Tax | 3% | City of Prescott |
| State Transaction Privilege Tax | 6.325% | State of Arizona |
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:
- 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).
- 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.
- Apply for your STR permit. Submit application + $95 fee. See permit types above to determine which applies.
- Register for tax accounts. Set up lodging tax accounts with Arizona Department of Revenue.
- Display your permit number. Include your permit/license number in all listings and advertisements.
- Collect and remit taxes. 12.275% on all bookings.
- 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. 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?
- No. Prescott allows non-owner-occupied short-term rentals, so investment properties can qualify provided you hold the required permit.
- 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. The host is responsible for collecting and remitting them.
- What happens if you run a short-term rental without a permit in Prescott?
- Operating without a permit can cost up to $2,500.
Tools for Short-Term Rental Hosts
AdServices that help hosts handle the legal, management, pricing, and cleaning side of a short-term rental.