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SB 1141

AN ACT RELATING TO TAXATION -- LEVY AND ASSESSMENT OF LOCAL TAXES

2025 Regular Session

Arizona SB 1141 preserves state preemption against bans on vacation/short-term rentals while allowing limited local rules (permits, notices, safety standards, and fines).

06/06/2025 Introduced, referred to Senate Housing and Municipal Government
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Bill Summary · SB 1141

SB 1141 — State Government: Vacation Rentals / Short‑Term Rentals (Arizona, 2025)

Status: Introduced (02/06/2025); Rule 3‑9(a) / Re‑referred to Assignments
Primary sponsor: Sen. John Kavanagh
Bill amends: A.R.S. §9‑500.39 and §11‑267.17 (related to vacation/short‑term rental regulation)

Purpose / Intent

SB 1141 clarifies and updates the limits on local regulation of vacation rentals and short‑term rentals in Arizona. It reaffirms state preemption against blanket bans while specifying the limited regulatory authorities cities and towns retain, establishes administrative timelines and application requirements for local permits/licenses, and creates defined penalties and suspension processes for noncompliance.

Key provisions (high‑level)

  • Prohibition on local bans: Cities/towns may not prohibit vacation or short‑term rentals.
  • Narrowly circumscribed local regulatory authority: Municipalities may regulate rentals to protect public health and safety (fire/building codes, sanitation, traffic, pollution), adopt and enforce zoning and nuisance rules applied consistently with other property classifications, and prohibit use for certain illicit/sex‑offender/adult‑oriented activities.
  • Owner contact information: Owners must provide emergency contact information (in‑person if required by public safety personnel, phone or email any time of day) prior to offering the unit for rent. Failure to provide required contact info may result in a civil penalty up to $1,000 for every 30 days of noncompliance; cities/towns must give 30 days’ notice before the initial penalty.
  • Local permit/license requirements: Cities that require a local regulatory permit or license may limit application content to:
    • Owner/agent name, address, telephone, email
    • Rental address
    • Proof of compliance with A.R.S. §42‑5005
    • Emergency contact info (per above)
    • Acknowledgment to comply with applicable laws
    • Fee not to exceed actual issuance cost or $250, whichever is less
  • Notification to neighbors: Before first rental, owner or designee must notify single‑family properties adjacent to and directly/diagonally across the street (multifamily: residents on same floor). Notification must include permit/license number (if any), rental address, and emergency contact info. Owners must provide an attestation to the municipality documenting who was notified and how.
  • Advertising disclosure: Owners must display the local permit/license number (or, if no local permit is required, the state transaction privilege tax license number) on advertisements.
  • Insurance or marketplace coverage: Require either liability insurance coverage aggregate of at least $500,000 or use of an online lodging marketplace that provides equal or greater coverage.
  • Accessory dwelling unit (ADU) residency requirement: If a property contains an ADU constructed on or after Sept. 14, 2024 and that ADU is used as a vacation/short‑term rental, the owner must reside on the property (with a statutory grandfathering for certain preexisting rights to build ADUs).
  • Permit issuance timeline and denial grounds: If a city requires a permit/license, it must issue or deny within 7 business days after receipt of required information (subject to A.R.S. §9‑835). Permits may be denied for failure to provide required info, unpaid fees, suspended permit for same rental, false information, or specified criminal/sex‑offender history (e.g., registered sex offender or certain recent felony convictions).
  • Administrative suspension: Municipalities may adopt ordinances to administratively suspend a local permit/license for up to 12 months for repeated verified violations. (The introduced text shows the threshold edited from “three” to “two” verified violations within a 12‑month period for suspension, excluding certain lesser aesthetic/parking/solid waste violations that are not serious threats to health — portion of the provision is truncated in the provided text.)

Who is affected

  • Short‑term and vacation rental property owners and their agents throughout Arizona.
  • Cities and towns (local governments), which retain limited regulatory roles but cannot ban rentals.
  • Guests and adjacent neighbors (notification and enforcement provisions).
  • Online lodging marketplaces (advertising/coverage provisions may affect platform policies).
  • Public safety and code enforcement officials administering permits, suspensions, and penalties.

Procedural / Timeline notes

  • Introduced Feb 6, 2025; currently at status “Rule 3‑9(a) / Re‑referred to Assignments.”
  • Companion: HB 1534.
  • The text amends specific Arizona Revised Statutes (§9‑500.39 and §11‑267.17); effective dates would be set if/when the bill is passed and signed.

Observations / Points to watch

  • The bill emphasizes rapid permit processing (7 business days) and caps application fees ($250), which could streamline compliance but may limit local fee revenue.
  • The owner‑residency rule for post‑9/14/2024 ADUs and the lowered violation threshold for suspension (apparent change from three to two) increase restrictions and enforcement exposure for some owners — implementation details and local ordinance alignment will be important.
  • Enforcement mechanics (verification of violations, administrative hearing processes) are referenced but portions of the suspension section were truncated in the provided text; full text should be consulted for procedural detail.

Compiled from official sources — confirm details with the bill’s official record.

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