What is a Tourism Improvement Area (TIA)? 
 
A Tourism Improvement Area (TIA) is a business-led district composed of lodging businesses that agree to pay a lodging business assessment to fund tourism marketing and promotion efforts. The purpose of a TIA is to increase visitation, boost hotel occupancy, and drive economic benefits for participating hotels and their surrounding communities. TIAs provide a dedicated, sustainable funding source to support tourism-related initiatives. Unless an Arizona resident stays in a hotel within a TIA district, the resident will not pay any assessment fees.   
 
 How is a TIA formed?

​

1. Lodging businesses in a proposed district voluntarily sign a petition requesting the formation of a Tourism Improvement Area.

2. The petition outlines the district boundaries, assessment rate, and tourism programs to be funded.

3. The city or county reviews the petition and issues a resolution of intention.

4. A public hearing is held so lodging businesses and the public can provide input.

5. The local governing body votes to approve or deny the district.

How is a TIA different from other taxes or assessments? 
 
Unlike traditional taxes, a TIA lodging business assessment is requested by lodging business owners through a petition process and implemented through a local ordinance. The assessment is industry-driven, and funds must be used for tourism improvement area activities such as advertising, promotion, and business recruitment that directly benefit lodging businesses and associated industries in the district. The law explicitly states that tourism improvement area activities do not include construction or maintenance of physical infrastructure.
 
 
Why does Arizona need a TIA? ​

​

• Tourism is the lifeblood of Arizona’s economy, reaching the far corners of the state. This is a fiercely competitive industry, and Arizona competes with destinations like Texas, Colorado and California, among others, all of which invest significantly more in tourism marketing. 

• Funding for Arizona’s tourism industry is significantly less than what our competition has to spend to attract leisure, group and convention business. 

• To date, 25 states and 216 cities – nationwide - have already enabled Tourism Improvement Areas, giving their destinations a competitive edge in attracting visitors, meetings, and events. 

• Traditional funding sources, such as state and city budgets, are not enough to sustain the level of marketing needed to remain competitive. 

• More visitors mean more dollars flowing into Arizona’s economy, supporting essential public services like police, firefighters, teachers, libraries, and parks. 

• By generating increased visitor spending, TIAs help reduce the tax burden on residents while enhancing their quality of life, creating demand that leads to more local businesses, attractions, and amenities that Arizonans can enjoy year-round. 

 
 
How does a TIA generate funding? 
​

​Participating lodging businesses collect an assessment (up to $5 or 5% per room per night) from guests and remit payments to the Arizona Department of Revenue at the same time they pay their transaction privilege tax. 
Funds are transferred to the designated Owners’ Board which oversees spending in alignment with the approved TIA plan. ​
 
 
What will the TIA funds be spent on? 

 TIA funds must be used for 'tourism improvement area activities,' which are defined as advertising, promotion, or business recruitment that are directly related to lodging businesses in the TIA, such as:

• Advertising and digital marketing campaigns targeting leisure and group travelers. 

• Incentives for conventions, meetings, and sporting events to increase bookings. 

• Support for destination marketing programs, special events, and visitor services. 

 
Funds must be used to benefit the lodging businesses that pay the assessment, but they may also support industries closely tied to tourism. These activities are intended to supplement, not replace, existing governmental activities and services.
 
 
Who oversees the TIA? 
 
Each TIA is governed by an Owners' Board, which must be composed of at least a majority of lodging business owners located within the TIA or their authorized representatives. The board ensures that funds are spent according to the approved TIA plan, with transparency and accountability measures in place. The governing body (municipality or county) contracts with the Owners’ Board to administer the funds. 
 
 
Who approves the formation of a TIA? ​

​

• A petition signed by lodging business owners within the proposed TIA must be submitted to the local governing body (municipality or county).

• A public hearing is held, allowing lodging businesses to provide input before final approval. 

• If written objections are received from lodging business owners representing 50% or more of total rooms, the governing body must end the hearing and may not pursue formation for one year.

 
 
What types of hotels are included in a TIA? 
​

• "Lodging business" means any business providing transient lodging that is subject to the state transient lodging classification, including properties that begin operating after the TIA is established.

• The TIA plan can distinguish among types or classes of lodging businesses, including by property size or number of rooms, and may vary assessment rates accordingly, as long as assessments are based on benefit received.

• Participation is voluntary at formation, and participating hotels have an annual 60‑day window each fiscal year to opt out under Arizona law.

• Businesses that did not sign the petition may join the district within 60 days after establishment by filing a notice of joinder.

• Businesses that signed the petition may withdraw during that same 60-day period.

 

 
Who is responsible to pay the assessment? 
​
The lodging business assessment is calculated on nightly room rentals. In practice, hotels typically pass this charge through to guests as part of their room charge, either embedded in the room rate or as a separately stated line item. 
 
 
How long does a TIA last? 
​
Initial term: Up to 10 years (as determined in the approved TIA plan). 
Renewals: A TIA can be renewed for additional 10-year terms through the same petition and approval process. 
 
 
Can a TIA be dissolved? 
 

​Yes. After a TIA has been operating for at least one year, there is a 60-day period each year in which lodging business owners that have paid assessments may petition for dissolution. If owners representing 50% or more of total rooms submit such a petition, the governing body must adopt a resolution of intention to dissolve and hold a noticed public hearing.​

On dissolution or expiration without renewal, any remaining monies must either be spent in accordance with the TIA plan or refunded to lodging business owners using the same method and basis used to establish assessments in the year the TIA is dissolved or expires.