Scottsdale passes new rules to crack down on nuisance parties at STRs

The Scottsdale, Arizona, City Council has approved new regulations designed to crack down on disruptive parties at short-term rentals (STRs). The new law goes into effect on June 6, 2024.

Under the new rules:

• The city will be able to hold promoters responsible for “nuisance parties” under city code.
• Municipal police will have the authority to remove nonresidents from a nuisance party. Only people legally residing on the property would be permitted to stay once a nuisance party is declared by police.
• Minors are barred from renting STRs.

While the new ordinance applies to non-STR residences as well, it’s primarily aimed at curbing nuisance parties — defined as “social activity that causes substantial neighborhood disturbance, including excessive noise and traffic, public drunkenness, and disturbances of the peace and litter” —at STRs. According to the city, service calls related to nuisance parties rose 73% over the past year, with 48% of those calls related to STRs.

“Scottsdale neighborhoods have consistently expressed frustration with short-term rental properties that market themselves as party pads and host loud, late-night gatherings,” said Scottsdale Mayor David D. Ortega. “We believe these ordinance changes will strengthen our ability to hold party promoters accountable.”

The most recent update to Scottsdale’s STR ordinance went into effect in 2023. The regulations require operators to register with the city. The law also requires vacation rental hosts to carry a minimum amount of liability insurance, notify neighbors that they’re running a short-term rental, conduct sex offender background checks on guests, and observe health and safety rules.

Arizona state legislation largely prohibits cities, towns, and counties from restricting short-term rentals, but local governments were given some leeway with a measure that went into effect in September 2022. Since then, cities and towns have the authority to regulate short-term rentals by:

• Requiring permits or licenses
• Requiring community notification of operations
• Mandating liability insurance coverage
• Fining owners or management companies when guests violate ordinances

“The Scottsdale City Council will continue to implement every possible tool allowable under state law — we established a local licensing program, created a Short-Term Rental Unit in the Scottsdale Police Department, and we have vigilant code inspectors to report problem properties,” said Ortega.

Arizona state law requires STR hosts to have a transaction privilege tax (TPT) license. That license number must be included in all ads. STR operators are required to collect state transaction privilege tax and county excise tax from their guests and remit it to tax authorities. The state requires all short-term rental online marketplaces, such as Airbnb and Vrbo, to collect and remit state and local taxes on Arizona short-term rentals.

Avalara MyLodgeTax can help Arizona STR operators comply with state and local tax registration, collection, and filing requirements. For more on Arizona lodging taxes, see our state vacation rental tax guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.