Sun Valley Short-Term Rental Regulations

Last verified: 2026-07-02
TL;DR
Sun Valley requires Local Option Tax Permit ($10.00) with no primary-residence requirement. Combined tax rate is 12% (6% Idaho state sales tax + 2% Idaho travel & convention tax + 4% Sun Valley Local Option Tax occupancy sales rate on short-term rentals). No annual day limit.
Disclaimer
This information is provided for general informational purposes only and does not constitute legal, tax, or regulatory advice. Short-term rental regulations change frequently. Always verify current requirements with your local government before listing your property or making investment decisions.
Key Requirements at a Glance
Permit ✓ Required — Local Option Tax Permit ($10.00)
Primary Residence Not required
Annual Day Limit No limit
Tax Rate 12% (6% Idaho state sales tax + 2% Idaho travel & convention tax + 4% Sun Valley Local Option Tax occupancy sales rate on short-term rentals)
Max Penalty $300 fine and/or up to 1 year in county jail (misdemeanor) per violation, with each month of continued noncompliance treated as a separate offense; violators also face Permit revocation.
Insurance Not required

New to short-term rentals? Jump to the compliance checklist →

Permit & Licensing

Local Option Tax Permit

FeeAmount
Initial cost$10.00
RenewalNo renewal fee — the Local Option Tax Permit has no expiration or periodic renewal cycle; Ordinance 484 establishes only a one-time $10.00 initial application fee and the Permit remains valid until revoked by the City Clerk for a violation.

This permit type does not require primary residence.

Application Process

Apply for a Local Option Tax Permit through the City Clerk's office

Tax Obligations

TaxRateAuthority
Idaho State Sales Tax 6% Idaho State Tax Commission
Idaho Travel and Convention Tax 2% Idaho State Tax Commission
Sun Valley Local Option Tax (Occupancy Sales) 4% City of Sun Valley

Combined rate: 12% (6% Idaho state sales tax + 2% Idaho travel & convention tax + 4% Sun Valley Local Option Tax occupancy sales rate on short-term rentals) of gross rental income.

Rental Limits

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

Zoning & Restrictions

STR premises must conform to the City's zoning ordinance

Insurance & Safety

Insurance

Sun Valley 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. Idaho Code 67-6539 (enacted by HB 583, effective July 1, 2026) prohibits Sun Valley and all Idaho local governments from imposing insurance mandates that single out short-term rentals; no city-specific STR insurance requirement or minimum coverage amount currently exists.

Penalties for Non-Compliance

Escalating tax-enforcement penalties under Ordinance 484: (1) a 5% late-payment fee plus 12% annual interest on any delinquent Local Option Tax return (Sec. 10d); (2) willful failure to collect, report, or remit the tax is a misdemeanor punishable by up to $300 and/or 1 year in county jail, with each month of continued noncompliance a separate offense (Sec. 19a); (3) any violation also triggers automatic Permit and tax-number revocation, appealable within 10 days (Sec. 19b); (4) after revocation, reissuance requires posting a security bond equal to 3x the average monthly tax owed (Sec. 19c); and (5) willful evasion carries an additional penalty equal to the full amount of tax evaded, not collected, or not remitted (Sec. 20), on top of the criminal penalty.

Compliance Checklist

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

  1. Apply for Local Option Tax Permit. Submit application + $10.00 fee.
  2. Register for tax accounts. Set up lodging tax accounts with Idaho State Tax Commission.
  3. Collect and remit taxes. 12% (6% Idaho state sales tax + 2% Idaho travel & convention tax + 4% Sun Valley Local Option Tax occupancy sales rate on short-term rentals) on all bookings.
  4. Renew annually. Contact city for renewal fee details.

Frequently Asked Questions

Do you need a permit to run an Airbnb in Sun Valley?
Yes. Operating a short-term rental — including an Airbnb or Vrbo — in Sun Valley requires a Local Option Tax Permit.
How much does a short-term rental permit cost in Sun Valley?
A Local Option Tax Permit in Sun Valley costs $10.00 per year.
Does Sun Valley require a short-term rental to be your primary residence?
No. Sun Valley 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 Sun Valley?
Sun Valley 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 Sun Valley?
Short-term rental stays in Sun Valley are subject to a combined 12% in lodging taxes. This combines 6% Idaho State Sales Tax + 2% Idaho Travel and Convention Tax + 4% Sun Valley Local Option Tax (Occupancy Sales). The host is responsible for collecting and remitting them.
What happens if you run a short-term rental without a permit in Sun Valley?
Escalating tax-enforcement penalties under Ordinance 484: (1) a 5% late-payment fee plus 12% annual interest on any delinquent Local Option Tax return (Sec.

Official Sources

  1. Starting a Business - City of Sun Valley, ID
  2. City Code of Sun Valley, Idaho (American Legal Publishing)
  3. Hotels, Motels and Short-Term Rentals | Idaho State Tax Commission
  4. Ordinance No. 484 (City of Sun Valley, Idaho) - Local Option Nonproperty Tax Ordinance, Section 8(a)
  5. Local Option Tax - City of Sun Valley, ID