What Is an Arizona TPT License and Do You Need One for Your Airbnb?
Operating an Airbnb, VRBO, or any short-term rental in Arizona? One of the first compliance steps you need to take is registering for an Arizona Transaction Privilege Tax license — commonly called a TPT license. Here's what it is, why you need it even if you're on a major platform, and how to get one.
What Is a TPT License?
The Transaction Privilege Tax is Arizona's version of a sales tax. For short-term rentals — stays under 30 days — it falls under the transient lodging classification, business code 025. The state TPT rate for transient lodging is 5.5%, and additional city and county taxes stack on top of that depending on where your property is located.
A TPT license is issued by the Arizona Department of Revenue through AZTaxes.gov and authorizes you to collect and remit this tax on short-term rental income.
Do You Need One If You're on Airbnb or VRBO?
Yes! — and this is where many new STR operators get confused.
Airbnb and VRBO are classified as Online Lodging Marketplaces under Arizona law. They collect and remit TPT on your behalf for bookings made through their platforms. This means you're not responsible for collecting that tax from guests yourself on platform bookings.
However, you are still required to hold your own TPT license. You must file monthly with ADOR, report your platform income under business code 025, and apply deduction code 775 to exclude the platform-collected portion. The filing is still required even if your net tax owed is zero.
Additionally, your TPT license number must be displayed on all advertising for your rental property — including your Airbnb and VRBO listings. Operating without a displayed license number is a compliance violation. Very important, if you accept reservations from your own website then you must send the tax you collect instead of inputting the deduction code of 775. That deduction code is only used for reservations on platforms like Airbnb or VRBO since they send the taxes directly to the state and you simply have to report what they sent using the above directions. This confuses many owners and hosts so be sure you are filing correctly.
How to Register
Go to aztaxes.gov and create an account or log in. Select the option to register a new business license and choose business code 025 — Transient Lodging. The process takes about 15 to 20 minutes and there is a small one-time registration fee.
Once registered you'll receive your TPT license number, which you'll use on all advertising and on your city STR license applications.
Monthly Filing
TPT is due on the 20th of the month following the reporting period. If your property had no bookings in a given month, you still need to file a zero return. Missed filings accrue penalties and interest quickly.
An Important Note for 2025
Effective January 1, 2025, Arizona eliminated the residential rental TPT on long-term stays of 30 days or more. If you previously had a TPT license with only business code 045, that license was automatically canceled on December 31, 2024. Short-term rentals under 30 days are unaffected — business code 025 remains fully required.
Getting Help With TPT Compliance
Monthly TPT filing is one of the core services Barrett Advisories provides to STR managers in the Scottsdale and Phoenix market. If you're not sure whether your properties are properly registered or whether your filings are current, that's worth a conversation. Schedule a free consultation at barrettadvisories.com.