Tempe, AZ Hotels & Lodging: Transient Occupancy Tax (2026)
Key Facts
- Base hotel tax
- 1.8% of gross lodging income (§ 16-444)
- Additional transient tax
- 5% on transient lodging (§ 16-447)
- Combined local rate
- 6.8% before state/county TPT
- Applies to
- Any hotel charging for lodging space
- No double tax
- Hotel income excluded from rental classification
- Collector
- Tempe Tax Collector administers both taxes
Summary
Tempe hotels pay two stacked privilege taxes on room charges: the standard 1.8% business activity tax under Section 16-444, plus an additional 5% transient lodging tax under Section 16-447 charged only on stays by transients. Together they push the local hotel tax rate to 6.8% of room revenue.
In addition to the taxes levied as provided in Section 16-444, there is hereby levied and shall be collected an additional tax in an amount equal to five percent (5%) of the gross income from the business activity of any hotel engaging or continuing within the City in the business of charging for lodging and/or lodging space furnished to any transient.
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: City Code: Supplement 33 Update 4 | Zoning and Development Code: Supplement 11 Update 2).
Full Breakdown
8% tax on the gross income of 'every person engaging or continuing in the business of operating a hotel charging for lodging and/or lodging space' furnished to any person, with exclusions for income already taxed under another classification, commissions on third-party services (potentially taxable instead under the rental sections, §§ 16-445 or 16-450), and separately billed telephone, fax or internet charges. charging for lodging and/or lodging space furnished to any transient,' on top of the base 16-444 tax; unlike the base hotel tax, this add-on applies specifically to transient guests rather than all lodging customers.
8% local tax load before state and county transaction privilege tax and any Maricopa County or state tourism assessments are added on top. Section 16-445(j) confirms the rental-of-real-property classification does not also apply to income already taxed as a hotel under § 16-444, preventing the same room charge from being taxed twice under two different Article IV classifications.
Violations & Fines
Chapter 16 enforces hotel tax compliance through the Tax Collector's audit, assessment and collection powers rather than a standalone criminal clause; a hotel operator who fails to collect, report or remit the § 16-444 and § 16-447 taxes is subject to the City's tax collection remedies and can still face the general Code penalty in § 1-7, up to $2,500 in fines or six months in jail, for the underlying violation.
Frequently Asked Questions
What is Tempe's total hotel tax rate?
Does the extra 5% hotel tax apply to every guest?
Can my hotel be taxed twice on the same room charge?
Sources & Official References
Other rules in Tempe
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Transient Occupancy Tax in Nearby Cities
How other cities in Maricopa County handle transient occupancy tax.