Short-term rentals (STRs) are explicitly allowed in Payson, Arizona, subject to a formal licensing program at the town level and permitting at the county level for properties in unincorporated areas. The Town of Payson requires an annual STR license for each property operated as an STR within town limits, and Gila County requires an annual STR permit for properties located outside of incorporated towns (unincorporated Gila County). Owners must also comply with state-level tax and registration requirements.

This guide is written for STR investors and is based solely on the provided municipal and county sources. It outlines how to launch and operate a compliant STR in Payson and throughout Gila County, the documents and permits you need, key operating regulations, and contacts for the relevant authorities.

Overview: Are Short-Term Rentals Allowed in Payson, AZ?

• Town of Payson (incorporated areas): Short-term rentals are allowed with a valid annual Town of Payson Short-Term Rental License. Ordinance No. 951 and Resolution No. 3322 govern licensing, safety, and operating requirements.
• Unincorporated Gila County (surrounding Payson): Short-term rentals are allowed with a valid annual Gila County STR permit under Ordinance No. 2025-01, which took effect in August 2025 and regulates STR use in unincorporated areas.
• State-level: Arizona requires a Transaction Privilege Tax (TPT) license for STR operators; Gila County Assessor registration is required by state law prior to renting.

You must obtain and maintain both the town license (if within Payson) and the county permit (if outside incorporated limits), in addition to state-level registrations and taxes.

How to Start a Short-Term Rental Business in This Market

The following steps provide a practical roadmap to launch an STR in Payson or unincorporated Gila County.

1. Confirm Your Property Location

• Verify whether the property sits inside Payson’s incorporated boundaries or in unincorporated Gila County:
  • Town of Payson boundary map: www.paysonaz.gov/home/showpublisheddocument/2800/638212087695070000
  • Interactive map: www.google.com/maps/place/Payson,+AZ+85541/@34.2444423,-111.3424616,14z/data=!3m1!4b1!4m6!3m5!1s0x872c10dd6a3e1a7d:0x8de0f8fc583ada2f!8m2!3d34.2308684!4d-111.3251355!16zL20vMHFwNTk?entry=ttu
• If inside Payson, you will apply for the Town STR license; if outside incorporated boundaries, you will apply for the County STR permit. Both may apply if you operate multiple properties across jurisdictions.

2. Obtain Arizona Transaction Privilege Tax (TPT) License

• Required by the Arizona Department of Revenue for STR operators before applying for town or county permits.
• Apply online: azdor.gov/transaction-privilege-tax/tpt-license/applying-tpt-license
• Keep your TPT number for all permit applications.

3. Register with Gila County Assessor

• State law (A.R.S. §33-1902) requires registration of rental property with the Gila County Assessor prior to renting.
• Register here: www.gilacountyaz.gov/government/assessor/rental_property.php
• This registration is mandatory even for Payson properties (town license) and is illegal to rent without this county registration.

4. Secure Required Insurance

• Maintain liability insurance appropriate to cover the vacation rental in the aggregate of at least $500,000; or
• Provide evidence that each transaction is covered by a platform (e.g., Airbnb, VRBO) that offers equal or greater primary liability insurance coverage.
• Maintain proof of coverage and provide it upon request.

5. Complete Jurisdiction-Specific Licensing/Permitting

• Payson (incorporated): Apply for the Town of Payson Short-Term Rental License (annual), see “Required Documents, Permits, Licenses, and Guidelines” below for process and requirements.
• Unincorporated Gila County: Apply for the County STR Permit (annual) via the County application portal; see details below.

6. Obtain a Payson Business License (If Applicable)

• A Town of Payson Business License is required if you own three or more properties within incorporated Payson.
• Apply via the Town Business Licensing portal: www.paysonaz.gov/business

7. Complete Fire Inspections

• Payson: Hosts must complete a fire inspection within 90 days of license approval.
  • Schedule inspection: www.paysonaz.gov/Home/Components/FormBuilder/FormBuilder/2b752787cb7f4c4dbc8fcc1e5acd1f54/64
• Unincorporated Gila County: No separate fire inspection requirement is stated in the county ordinance; comply with applicable building and life-safety codes as part of permitting and operations.

8. Establish Commercial Trash Service

• Evidence of commercial trash hauling services to the property address is required for the Town of Payson STR license. Trash must not be stored in public view except in proper collection containers.

9. Prepare Neighbor Notification, In-Property Notices, and Online Disclosures

• Payson: Provide written neighbor notification to adjacent and diagonal properties within 7 days of license issuance (or prior to first offering for rent), include permit number, STR address, and 24-hour emergency contact.
• Display on-premises notices per code (14-point bold, laminated) on front door and primary backyard door, including fire extinguisher location, parking, and waste disposal rules; see printable version below.
• Post the required online disclosure in all listings (per Payson rules) and ensure the permit number appears on each advertisement.

10. Implement Background Check Procedures and Guest Rules

• Conduct a sex offender background check within 24 hours of every booking (owner or platform). Retain full records for at least 12 months and make them available to police upon request.
• Provide each guest with written rules (noise, parking, trash, event restrictions, evacuation routes) before or at check-in; keep records of compliance.

Required Documents, Permits, Licenses, and Guidelines

Town of Payson (incorporated STRs)

• Annual STR License Cost: $250 per property (non-refundable).
• Methods of Payment: Phone (928-472-5000); Online portal: www.xpressformsbuilder.com/viewer/a668769f-a716-4f8d-98ae-5adb05565ebc; Mail checks to:
  • Town of Payson, Attn: Short Term Rental, 303 N. Beeline Hwy, Payson, AZ 85541
• Required Documents/Information for Town License Application:
  • TPT license number (Arizona Department of Revenue)
  • Owner entity details (if applicable) and statutory agent; designee identification
  • 24-hour emergency point of contact (name, address, phone)
  • Attestation of compliance with all laws; owners and designees must not be registered sex offenders and must not have certain recent felony convictions
  • Liability insurance evidence (≥ $500,000) or platform coverage
  • Proof of lawful presence in the United States (for individual applicants, per A.R.S. §41-1080)
  • Evidence of commercial trash hauling service to the property address
  • Property boundary confirmation (see Town boundary map)
• Fire Inspection: Required within 90 days of approval. Schedule using the Payson form.
• Business License (if ≥ 3 Payson properties): Required via the Town business licensing portal.

Gila County (unincorporated STRs)

• Annual STR Permit Cost: $225 per property (new and renewal).
• Permit Duration: One year from approval/issuance.
• Application Portal: portal.deckard.com/az-gila-str-portal
• Required Documents/Information for County Permit Application:
  • Physical address of the STR
  • Owner(s) contact details; statutory agent details if owner is a legal entity
  • Designee details and authorization certification
  • 24-hour emergency point of contact (must be a human being, not a legal entity)
  • Agreement to comply with applicable laws; owner/designee attestations (no sex offender status; no relevant recent felony convictions)
  • Proof of compliance with A.R.S. §42-5005 (Transaction Privilege Tax)
  • Proof of ownership (copy of the deed)
  • Verification of wastewater system (property served by a septic system, not a cesspool; contact the Building Department at 928-474-7110, option 4, with questions)
  • Proof of insurance per Section 3.4.2 of the County Ordinance
• Neighbor Notification:
  • Notify all single-family residential properties adjacent to, directly across, and diagonally across from the STR; in multi-family buildings, notify all units on the same floor.
  • Include permit number, STR address, and 24-hour contact; notify within 15 business days of any contact changes.
  • Keep attestation records per County requirements.

State-Level Requirements

• TPT License: Apply through the Arizona Department of Revenue; required for STR operations in Arizona.
• County Assessor Registration: Register rental property with Gila County Assessor prior to renting (A.R.S. §33-1902).

Specific Regulations for Short-Term Rentals in Payson (Town), Gila County (Unincorporated), and Arizona (State)

Payson (incorporated) — Core Operating Rules

• License Scope: Each property requires its own annual STR license. Operating without a license is prohibited.
• Neighbor Notification: Provide written notice to adjacent and diagonal residential properties; include permit number, STR address, and 24-hour contact. Provide within 7 days of license issuance or prior to first rental, whichever is sooner.
• Required Online Listing Disclosure (display prominently): “The Owner of this property will provide you with pertinent safety information, explain your responsibilities under the Town of Payson Town Code, and expect you to certify your compliance therewith. You must not use this property for any nonresidential or other prohibited activity or use, as defined in Town of Payson Town Code Section 116.05. Any renter who causes, permits, facilitates, aides, or abets such prohibited use of this property shall be subject to a civil infraction carrying a mandatory penalty of a minimum of $500.00, in addition to any other penalties which the Town may impose. The use of this Short-Term Rental to house sex offenders is prohibited by State Law and by the Town of Payson Town Code. The Owner of this Short-Term Rental is required to perform a background check on you and your guests prior to your stay.”
• In-Property Posting (14-point bold font on laminated or shielded paper; place on front door and primary backyard door or conspicuous location near each door):
  • Include location of all fire extinguishers; Town parking and waste disposal rules; and the following notice:
    • “USE OF THIS PROPERTY FOR ANY OF THE FOLLOWING PURPOSES IS PROHIBITED; VIOLATORS MAY BE SUBJECT TO SUBSTANTIAL PENALTIES:
      1. Housing sex offenders;
      2. Operating or maintaining a sober living home;
      3. Selling controlled substances, liquor, or pornography;
      4. Obscenity, nude or topless dancing, and other adult-oriented businesses, performances, parties, or activities in which value is given in exchange for an adult-oriented service;
      5. Any uses prohibited under A.R.S. § 9-500.39, or federal, state, or local law; or
      6. Any use that disturbs neighboring properties’ peace and enjoyment including, but not limited to, excessive noise, impeding traffic, obstruction of public streets by crowds or vehicles, use or possession of illegal drugs, drinking in public areas, the service of alcohol to minors or consumption of alcohol by minors, fighting, disturbing the peace, and/or littering.
    • “USE OF THIS PROPERTY FOR ANY OF THE FOLLOWING PURPOSES IS PROHIBITED; VIOLATORS MAY BE SUBJECT TO SUBSTANTIAL PENALTIES:
      1. For a special event that would otherwise require a permit or license pursuant to Town ordinance or a state law or rule; or
      2. Operating a retail business, restaurant, event center, banquet space, or similar use.”
    • “Your local contact person’s name is _____________ and can be reached by phone 24 hours a day, seven days a week at -_____-___.”
  • Download the printable notice: www.paysonaz.gov/home/showpublisheddocument/2802/638216607487100000
• Required Contact Display: Display owner/designee name, phone, email, and emergency contact conspicuously within 15 feet of the primary entrance.
• Advertisement Requirements: Include the Town permit number on each advertisement and provide guests with applicable rules/regulations at booking.
• Background Checks: Conduct sex offender background checks within 24 hours of every booking; retain records for ≥ 12 months. The owner remains liable even if a platform fails to perform checks.
• Fire Inspection: Complete within 90 days of license approval; renewals use the second-year fire inspection form for subsequent years.
• Complaints: Respond promptly (in person for incidents requiring response within one hour; within 24 hours for other issues). Failure to respond is a violation.
• Guest Rules: Provide written rules (noise, parking, trash collection schedules, event restrictions, fire evacuation routes) before or at check-in; keep a record of compliance.
• Trash Service: Contract commercial trash hauling; do not store trash in public view except in proper collection containers.
• Good Neighbor Policy: Review and distribute the Town’s “Good Neighbor” brochure to neighbors and guests: www.paysonaz.gov/home/showpublisheddocument/2824/638224247312000000

Gila County (unincorporated) — Core Operating Rules

• Permit Requirement: Annual permit required for each STR; unlawful to operate without a County-issued permit.
• Fee and Term: $225 per property; permit valid for one year from issuance.
• Eligible Property Types: Single-family houses; duplexes and 1–4 unit houses; condominiums, townhouses, cooperatives; individual rooms within dwellings; guest houses, casitas, mother-in-law quarters.
• Prohibited Property Types and Uses:
  • Structures not approved as dwellings; unsafe structures (garages, sheds) not meeting adopted building codes.
  • Apartment complexes with five or more units.
  • Recreational vehicles, travel trailers, motorhomes.
  • Temporary structures (tents, inflatable domes, etc.).
  • Special events/public functions that would require a Temporary Use Permit (e.g., concerts, conferences, weddings, banquets) are prohibited.
• Neighbor Notification: Notify adjacent, directly across, and diagonally across residential properties; in multi-family buildings, notify all units on the same floor; notify within 15 business days of any contact changes. Provide permit number, STR address, and 24-hour contact.
• Background Checks: County ordinance requires owner/designee attestations regarding sex offender status and certain felony convictions; hosts should follow best practices for guest screening consistent with town rules if they operate in both jurisdictions.
• Proof of Insurance: Required as per Section 3.4.2 of County Ordinance.
• Wastewater System: Documentation confirming septic service (not a cesspool) is required