Online Lodging Marketplace Guidelines
Effective Jan. 1, 2019, all online lodging marketplaces (OLM) are required to register to file and pay on all online lodging transactions with the department. An online lodging marketplace is any digital platform that provides, at a cost, an unaffiliated third party with a platform to rent lodging accommodations.
Arizona Department of Revenue (ADOR) has created a notice to identify the different online platforms used by owners to list short term rentals and whether these online platforms are required to register with ADOR as an online lodging marketplace to collect and remit transaction privilege taxes (TPT) from online lodging transactions received from the short term rentals in Arizona.
Download TPN 19-1
Depending on the type of business, there are different reporting requirements. Please click on the factsheet to determine the reporting requirements of each type of business. See TPN 19-1
This is a third-party online lodging marketplace that list properties for rent and collects the full amount charged by the operator for accommodations booked by the customer. See TPN 19-1
The owner of the property is called the operator in the OLM business classification. A property management company contracts with the operator of a property located in Arizona to provide property management services, marketing of the property, and rent collection, of short-term rental properties all for a fee.
An online lodging operator or short-term/vacation properties may not offer for rent or rent a lodging accommodation without first obtaining a current TPT license. This is true whether or not the owner or operator offers the accommodation through an online marketplace (OLM) i.e. AirBnB. Additionally, long-term property owners are required to be licensed in those cities that impose a privilege tax on residential rentals.
Operators should note that penalties are imposed for not obtaining a TPT license or displaying that license on any advertisement, including OLM postings (even if an operator is listing their property only on an OLM website they still obtain a TPT license).
Operators that book ONLY through an OLM are still obligated to file a tax return showing the gross receipts received from the OLM with a deduction equal to the amount received from the OLM (deduction code 775). This return should be filed on AZTaxes.gov and the operator may elect to report on an annual basis.
See TPN 19-1
Class One Property Owners (mainly hotels)
This business rents lodging accommodations classified as class one property for property tax purposes under A.R.S. §42-12001. This is mainly hotels but not apartment buildings. See TPN 19-1
Download Online Lodging Marketplace Reporting Factsheet
There are two exemption certificates to be used to document the non-taxable transactions in the online lodging marketplace business classification.
Form 5018 is completed by the OLM and given to the owner of the property (operator) to document that the OLM has or will remit the tax on the lodging accommodation to the department. Both the OLM and the operator will keep copies of this document.
Form 5019 is completed by the class one property owner and is given to the OLM. This documents that the class one property owner has or will submit the tax on the lodging accommodation to the department. Both the OLM and the class one property owner will keep copies of this document.
For further assistance, please email [email protected].