City News

After concern from the public as well as push back from a legal watchdog, the city’s ordinance on short-term vacation rentals is already being modified.

By a unanimous vote, the Sedona City Council approved on Tuesday, Dec. 13, the amending of its new short-term rental regulations.

On Oct. 11 the city code was amended to adapt to the rules imposed by SB 1350, which now allows short-term vacation rentals throughout the state. The new law supersedes the city’s longtime code that prohibited that type of rental. A city report states that following approval of that amendment, a concern was raised regarding the specific requirement that emergency contact information be posted outside of any residence being used as a short-term vacation rental.

“We included this [requiring posting on the outside of the residence] without thinking there would be problems with it,” City Attorney Robert Pickels said. “The Goldwater Institute disagreed with us on that. They were kind enough to send us a letter that identified the problems they had with that particular provision — privacy issues that would be exposed. Once we took another look at it, I didn’t disagree with their conclusion.”

The posting requirement was included in the ordinance at the suggestion of the regulated community in a goodwill effort to engender support from neighboring property owners by enabling ready access to emergency contacts for expression of complaints, Pickels said.

In the absence of a specific health, safety or welfare justification for the requirement that emergency contact information be posted — and in light of the alternative requirement that emergency contact information be provided by alternate, less intrusive means — it is recommended that the posting requirement at issue be removed, Pickels said.

Instead, the owner’s contact information will be posted on the inside of the house and will be available at city hall and with the Sedona Fire District.

The ordinance states that those renting their homes will be required to obtain a city business license as well as obtain a transaction privilege taxes license with the state. However, online companies like Airbnb handle the TPT and business license as long as the customer continues working through them. If the owner decides to rent his home on his own, he must file TPT with the state and obtain a city business license.

In addition to the positing of contact information, those who do rent their homes for less than 30 days will be obligated to obtain a TPT through the Arizona Department of Revenue. Tax must be collected and remitted by individual property owners or by online lodging businesses such Airbnb.

Pickels has previously said some of the important facts to remember include:

  • SB 1350 renders Sedona’s ordinance prohibiting short-term rental invalid.
  • Any new regulations must demonstrate a health, safety and welfare issue and must be consistent with regulations applied to other residential uses.
  • SB 1350 authorizes the city to require an emergency contact for a rental property, which could prove a valuable mechanism to track short-term rental activity.
  • It remains unclear if rental activity will proliferate or whether the activity will cause negative impacts greater than those experienced with other residential uses.
  • SB 1350 contemplates collection of sales tax.
  • It is not clear how the state will enforce sales tax collection.

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