Read all information on this page before applying for a Vacation Rental registration.
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As a vacation rental operating in the City limits, you will be required to collect and remit transaction privilege (sales) tax on gross income derived from the business activity. As of January 1, 2019, all online short-term vacation rental marketplaces, including Airbnb, VRBO, and HomeAway, are required to register with the Arizona Department of Revenue and collect the tax on bookings, however, the property owner is still required to obtain a Transaction Privilege Tax license regardless of whether the property owner utilizes an Online Lodging Marketplace or not.
The City transaction privilege tax is 2% of the gross income. For all rental activity for a period of 29 consecutive days or less, there is an additional tax of 3% called transient occupancy or “bed tax”. All transient occupancy transactions are also subject to a state tax of 6.325%. The total tax rate for transient occupancy is 11.325%. For more information, visit the privilege (sales) tax page. For more information, visit the privilege (sales) tax page.
Per City of Prescott Land Development Code 6.2.4, B, recreational vehicles, motor homes, utility trailers, camp trailers, boats and similar equipment that is allowed to be stored on residentially-zoned property in accordance requirements of Sec. 5.9, RV, motor homes and Similar Storage, shall not be used for sleeping or habitation purposes.
Maximum overnight occupancy of the vacation rental unit is specified as two persons per bedroom (thirteen years of age and older), plus two additional people per rental. For example: a 3-bedroom Vacation Rental allows a maximum overnight capacity of 8 people.
A local contact person is required who can respond in-person to the site of the vacation rental within 45 minutes to initial or successive complaints.
Prior to occupancy, the owner or owner’s agent shall enter into a written rental agreement as specified in City Code 4-9-6(G)
The owner is required to notify property owners in immediate proximity on all sides that the property is used as a vacation rental including the name and 24 hour telephone number of the local contact person. We have provided a template letter in the “Resources” Section:
Prior to occupancy, the local contact person shall provide the responsible person of a vacation rental with the following information (this information must also be posted in a conspicuous place within the unit):