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VACATION RENTALS FREQUENTLY ASKED QUESTIONS

Q: How do I comply with the City’s new regulations on short-term vacation rentals?

A: Prior to renting your property for less than thirty (30) days, you must register with the City and provide the name and the twenty-four-hour telephone number of a local contact person to all property owners within 300 feet of the vacation rental.  For mailing information on nearby properties, please consult the Mohave County Assessor’s Office records.

When you rent the property, the written rental agreement needs to identify and be signed by the responsible person.  The agreement will also include the occupancy limits established for the unit, trash disposal information and City noise prohibitions, including quiet hours from (10 pm to 7 am).  The responsible person is the occupant of the vacation rental, who is responsible for ensuring that all guests’ conduct complies with these expectations.    

The Good Neighbor Brochure, produced by the City, provides guidance to vacation renters as to the noise prohibitions, trash disposal, parking regulations and how many overnight guests are allowed in the unit.  The brochure should be available in the unit and provided to each responsible person upon signing the rental agreement. 

The local contact person is tasked with responding in a timely and appropriate manner to any complaint that an occupant or guest of the rental is creating unreasonable noise or disturbances, is engaged in disorderly conduct, or violating local or state laws.

 

Q: What is a short-term vacation rental?

A:  Simply, it is any type of paid lodging for a period less than 30 days.  For tax purposes, a short-term vacation rental falls under the definition of a hotel.  The Lake Havasu City Tax Code defines a hotel as any public or private hotel, inn, hostelry, tourist home, house, motel, rooming house, apartment house, trailer, or other lodging place within the City offering lodging to transients for compensation.  Transient means any person who at their own expense or at the expense of another obtains lodging space for less than 30 consecutive daysSee Lake Havasu City Tax Code Section 3.01-100.

 

Q: Do I need to pay sales tax if I rent my property as a short-term vacation rental?

A: Yes, if your property falls under the definition of hotel and is rented to a transient for less than 30 days.  The applicable City sales tax equals 5% of the gross income from the business activity (2% applied under Section 3.04-444 and 3% applied under 3.04-447). The State and County rates for this activity are 5.78%, equating to a total tax rate on the gross income of the hotel activity at 10.78%.  

 

Q: How do I remit sales tax I collect from renters?

A: Reporting and remitting sales tax is handled through Arizona Department of Revenue.  Prior to reporting taxes, a “TPT License” is needed. Additional information and applications for a TPT license can be found at:

https://www.aztaxes.gov/

Paper applications are available at City Hall.

 

Q: Do I still have to pay sales tax if I do not live in Lake Havasu City?

A: Yes. Business activity is conducted within Lake Havasu City when the lodging is rented regardless of where the property owner resides.

 

Q: Do I have to pay any hotel sales tax on my property that is rented for more than 30 consecutive days?

A: Generally, if you rent for 30 days or more, the income is not taxable under hotel business activity.  However, if you bill the occupants for intervals less than 30 days and your property falls under the definition of hotel, the income becomes taxable.  For example, if you rent your condo for three months and bill the occupant for each month, then the income is not taxable as hotel business activity. If you instead billed that same occupant biweekly, then the income is taxable as hotel business activity even though the occupant stayed for three months because the billing intervals are less than 30 days.

 

Do you have additional questions? Please email taxinfo@lhcaz.gov or call (928)854-0742.