AZ HB2481

Prohibits cities, towns, and counties from banning vacation rentals or short-term rentals, but allows regulation for public health and safety, reasonable zoning ordinances, and prevention of illegal activities.

Requires vacation rental and short-term rental owners to provide contact information to local authorities and restricts occupancy to the lesser of local limits or two adults per bedroom plus two additional adults.

Establishes licensing and registration requirements for vacation rentals and short-term rentals, with cities, towns, and counties required to report verified violations to the Department of Revenue within 30 days.

Imposes escalating civil penalties on online lodging operators for verified violations: $500 for first violation, $1,000 for second violation within 12 months, and 50% of gross monthly revenues or $1,500 (whichever is greater) for third and subsequent violations within 12 months.

Exempts vacation rentals and short-term rentals from residential rental property inspection and licensing requirements, and prohibits advertising that exceeds occupancy limits or promotes nonresidential uses such as retail, restaurants, or event spaces.