Lake Havasu City, AZ Hotels & Lodging: Transient Occupancy Tax (2026)

Section 3.04-444 sits in Article IV, Privilege Taxes, of Chapter 3.04 and sets the hotel classification rate at two percent of gross income earned from operating a hotel that charges a transient for lodging or lodging space. The section carries its own exclusions: income from housing prisoners under federal, state or other jurisdiction in a privately operated prison, jail or detention facility is not taxed; gross income already taxed to the same person under another business activity in Article IV is excluded, capped at the consideration actually paid to that person; income from transactions that would not be taxable if the guest were not a transient is excluded; commissions received from a person providing services or property to hotel customers are excluded from the hotel rate, though Section 3.04-445 or 3.04-450 may reach those commissions as rental or leasing income instead; and separately stated telephone, fax or internet charges billed to guests are excluded here but may be taxed under the telecommunication services classification at Section 3.04-470.

The city's Tax Collector, not the Arizona Department of Revenue, administers this local tax and the Transaction Privilege and Use Tax License required of any person operating the business under Section 3.03-300. Because the classification turns on charging a transient for lodging space rather than on the word 'hotel,' a short-term vacation rental operated on the same transient-lodging basis is taxed at the same two percent rate as a traditional hotel or motel.