AZ HB2672

Prohibits cities, towns, and counties from banning vacation rentals or short-term rentals, but allows regulation for public health/safety, zoning/nuisance issues, illegal activities, and requiring owner contact information.

Requires vacation rental and short-term rental owners to obtain a transaction privilege tax license and display the license number on all advertisements for the rental property.

Establishes civil penalties for online lodging operators: $250 for first offense and $1,000 for subsequent offenses for failing to comply with tax license requirements; $500-$1,500+ for verified violations depending on number of violations within 12 months.

Prohibits use of vacation rentals and short-term rentals for nonresidential purposes, special events requiring permits, or businesses such as retail, restaurants, or banquet spaces.

Allows cities, towns, and counties to notify the Department of Revenue of verified violations and requires owners and the department to be notified within 30 days of any verified violation.