Arizona prosecutors say Sedona's regulation requiring short-term rentals to obtain a city business license violates state law.
In a 10-page investigative report released Monday, Arizona Attorney General Mark Brnovich (burn-o-vich) says Sedona officials have 30 days to resolve the violation or risk losing state-shared revenue.
A 2016 Arizona law allowed Airbnb and other online booking companies to collect taxes on behalf of short-term renters and turn the funds over to the state to be divided up for municipalities.
Investigators from the Attorney General's Office say Sedona's City Council amended the city code earlier this year and forced short-term rentals to get a business license or permit before renting property.
Obtaining a business license requires the submission of an application and a payment of a $50 fee.