Executive Overview

Short-term rentals ARE explicitly allowed in Cody, Wyoming, though they are subject to comprehensive zoning, safety, and tax regulations. Cody operates a structured regulatory framework that distinguishes between residential and commercial zoning districts, with specific requirements for each. The city requires registration, fire safety inspections, and compliance with occupancy limits, while also mandating state-level tax collection for all lodging facilities.

Unlike more restrictive Wyoming markets like Jackson Hole, Cody offers a relatively accessible regulatory environment for STR investors, with approximately 134 registered short-term rentals as of 2023—a 36% increase from 2019. The city's approach focuses on safety compliance, zoning appropriateness, and tax collection rather than restrictive caps or complex approval processes.

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Starting a Short-Term Rental Business in Cody

Step 1: Property Selection and Zoning Verification

Before purchasing or listing a property, verify it falls within an approved zoning district:

Residential Districts (R-2, R-2MH, R-3, R-4):

• STRs permitted with specific conditions
• R-2 and R-2MH zones require owner-occupancy
• Owner must live on the property or immediately adjacent lot during rental periods
• R-3 and R-4 zones may allow non-owner-occupied operations

Commercial Districts (D-1, D-2, D-3):

• More flexible operational requirements
• No owner-occupancy mandate
• D-1 zone has additional restrictions (single booking, max 4 STRs per property)
• D-2 and D-3 zones allow individual room rentals (max 5 rooms)

Step 2: Registration Process

1. City of Cody Registration: Complete appropriate application form (residential or commercial)
2. Schedule Inspection: Contact Community Development Department at (307) 527-3482
3. Pass Fire/Life Safety Inspection: Must be completed before operation
4. Receive Certificate: Authorization certificate must be posted in the rental unit
5. State Tax Registration: Register with Wyoming Department of Revenue

Step 3: Financial Planning

Budget considerations:

• $100 application fee (City of Cody)
• Inspection fees (variable)
• Insurance (commercial coverage recommended)
• Taxes: 4% state sales tax + 5% state lodging tax + local taxes
• Setup costs for safety equipment compliance

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Required Documents, Permits, and Licenses

City-Level Requirements

Short-Term Rental Registration Certificate

• Issued by City of Cody Community Development Department
• Must be posted prominently in the rental unit
• Registration number required in all online listings
• Annual renewal by May 1st

Fire/Life Safety Inspection Certificate

• Required before initial operation
• Annual inspection requirement
• Additional inspections upon ownership changes and every third year
• Certificate issued upon passing inspection

State-Level Requirements

Wyoming Sales Tax License

• Obtained from Wyoming Department of Revenue
• Required for 4% state sales tax collection
• Application through: revenue.wyo.gov/divisions/excise-tax/excise-tax-forms

Lodging Tax Registration

• Required for 5% state lodging tax on stays under 30 days
• Registration as lodging facility with WY Department of Revenue
• Many listing platforms (Airbnb, VRBO) collect automatically

Safety and Building Compliance

Required Safety Equipment:

• Smoke detectors (code-required locations)
• Carbon monoxide alarms (where required)
• Fire extinguisher (minimum 2A:10-B:C rating)
• Emergency escape/rescue openings in sleeping rooms (egress windows)
• Posted emergency contact information
• Visible address numbers (4" minimum height)

Insurance Requirements

• Standard homeowner's insurance typically insufficient
• Commercial STR insurance recommended
• Must cover liability, property damage, and business interruption
• Many insurance companies don't cover short-term rentals—specialized policies available

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Specific Regulations by Jurisdiction

City of Cody Regulations

Occupancy Limits:

• 1 guest bedroom: maximum 4 guests
• 2 guest bedrooms: maximum 6 guests
• 3 guest bedrooms: maximum 8 guests
• 4+ guest bedrooms: maximum 10 guests

Booking Restrictions:

• Single booking requirement: Property must be rented to one group at a time
• No separate bedroom rentals in residential zones
• D-1 commercial zone: single group bookings only
• D-2 and D-3 zones: individual room rentals allowed (max 5 rooms)

Parking Requirements:

• Owner-occupied properties: 1 guest parking space per 2 guest bedrooms
• Non-owner-occupied: additional parking not required
• Must comply with Chapter 16 "Off Street Parking" requirements

Owner-Occupancy Requirements (R-2/R-2MH zones):

• Owner must live on property or immediately adjacent lot
• If owner lives elsewhere (even seasonally), STR prohibited during absence
• Authorized methods:
  • Room rental while owner present
  • Accessory dwelling unit rental while owner in main dwelling
  • Main dwelling rental while owner in accessory unit
  • Rental while owner in immediately adjacent dwelling

Park County (Unincorporated Areas)

Current Status:

• No comprehensive county-wide STR ordinance as of 2025
• County gathering public input since 2019
• Regulations anticipated based on 2024 Land Use Plan updates
• Opportunity exists before restrictions implemented

State of Wyoming Requirements

Tax Structure:

• State sales tax: 4% on all rental income
• State lodging tax: 5% on stays under 30 days
• Combined state rate: 9%

Local Tax Additions:

• Park County lodging tax: typically 1-4%
• Total combined tax rate: approximately 10-13%
• Additional resort district taxes may apply in certain areas

Business Classification:

• Short-term rentals classified as "lodging facilities"
• Subject to same regulatory framework as hotels/motels
• Compliance with Wyoming lodging facility requirements mandatory

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Contact Information for Local Authorities

City of Cody Departments

Community Development Department (STR Registration)

• Phone: (307) 527-3482
• Address: 1338 Rumsey Avenue, Cody, WY 82414
• Handles: Applications, inspections, compliance monitoring

Building Division

• Phone: (307) 527-6281
• Address: 1338 Rumsey Avenue, Cody, WY 82414
• Handles: Building permits, safety inspections, code compliance

Planning Division

• Phone: (307) 527-7511
• Address: 1338 Rumsey Avenue, Cody, WY 82414
• Contact: Todd Stowell, City Planner
• Handles: Zoning verification, land use questions

Fire Department (Safety Inspections)

• Phone: (307) 527-5500
• Address: 1402 River View Drive, Cody, WY 82414
• Handles: Fire safety inspections, emergency planning

Park County Government

Planning and Zoning Department

• Phone: (307) 527-8540
• Address: 1002 Sheridan Ave., Suite 109, Cody, WY 82414
• Email: planning@parkcounty-wy.gov
• Website: parkcounty-wy.gov

Wyoming State Agencies

Department of Revenue

• Phone: (307) 777-5200
• Excise Tax Division: (307) 777-5200
• Website: revenue.wyo.gov
• Handles: Sales tax and lodging tax registration

Wyoming Office of Tourism

• Phone: (307) 777-7777
• Provides: Market data, tourism statistics

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Source Links and References

City Application Forms and Regulations:

• Cody WY Residential STR Application
• Cody WY Commercial STR Application

State Tax Resources:

• Wyoming Department of Revenue Forms

Industry Analysis and Context:

• Wyoming STR Regulations Overview
• Cody STR Market Analysis

Historical Context:

• Cody Enterprise STR Regulatory History

Official City Resources:

• City of Cody Website
• Cody WY Building Department

County Resources:

• Park County Website

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Compliance Checklist for New Operators

Pre-Operation Requirements

• [ ] Verify property zoning compliance
• [ ] Complete city STR application and pay $100 fee
• [ ] Register with Wyoming Department of Revenue
• [ ] Schedule fire/life safety inspection
• [ ] Install all required safety equipment
• [ ] Obtain appropriate insurance coverage
• [ ] Set up tax collection systems

Ongoing Compliance Requirements

• [ ] Display registration certificate in rental unit
• [ ] Include registration number in all listings
• [ ] Collect and remit applicable taxes monthly/quarterly
• [ ] Maintain annual inspection schedule
• [ ] Respond to city inquiries and compliance requests
• [ ] Monitor for regulatory changes

Best Practices for Success

• [ ] Embrace Western/cowboy theme in property and marketing
• [ ] Maintain good neighbor relations
• [ ] Highlight Yellowstone proximity and local attractions
• [ ] Plan for seasonal revenue fluctuations
• [ ] Consider professional property management if needed
• [ ] Stay informed about potential regulatory changes

This comprehensive regulatory framework positions Cody as an attractive STR market for investors seeking a balance between opportunity and reasonable oversight. The key to success lies in thorough pre-planning, full compliance from day one, and maintaining awareness of the evolving regulatory landscape.