Overview: Are short‑term rentals allowed in Sheridan, WY?

Yes—short‑term rentals (STRs) are allowed in the City of Sheridan under Wyoming state law. However, there are meaningful local conditions. The city has not enacted a dedicated STR ordinance, so STRs are treated as a home‑based business use and must comply with zoning and building/fire codes. Notably, if you operate an STR in an Accessory Dwelling Unit (ADU) on your property, an owner must occupy one of the units, and only one STR license may be issued for the property. In practice, this limits full short‑term rental of a standalone non‑owner‑occupied ADU. As of July 2025, there are no city‑specific licensing or tax collection rules beyond those common to Wyoming’s business, zoning, and health/safety requirements; county‑wide STR regulations were also not in place as of the latest public reporting. [1][2][3][4][5]

How to start a short‑term rental business in Sheridan

• Confirm zoning and property configuration.
  • Primary residence: Primary‑home STRs typically operate as home‑based businesses in residential zones; verify compliance with any home‑based business standards and off‑street parking.
  • ADU (Accessory Dwelling Unit): STRs are only permitted if an owner occupies either the single‑family unit or the ADU. Only one STR license may be issued for the lot (for either the primary dwelling or the ADU). If you do not live on site, short‑term rental of the ADU is not allowed. [5]
• Design, permitting, and inspections.
  • ADUs must be created via building permit and obtain a certificate of occupancy (CO). A Pre‑Planning Application is required before building permit submission, including a dimensioned site plan, floor plan, and a letter of intent. Detached ADUs must be in the rear yard; height cannot exceed 25 feet; size is capped (800 sq. ft., with a 1,000 sq. ft. allowance on lots over 10,000 sq. ft.). Utilities must be municipal (sewer, water, gas, electric) and branched from a single main service line; will‑serve letters from providers are required with the building permit. [5]
• Licensing and registrations.
  • Treat the STR as a home‑based business. If your property includes both an ADU and a primary home, you may obtain up to two long‑term residential rental licenses (lease terms >30 days) with a separate business license for each rental, but only one STR license total across the entire property. [5]
• Safety and insurance.
  • Standard building and fire codes apply. Confirm smoke/CO detectors, egress, and any fire safety features. Homeowner’s insurance may not cover commercial activity; obtain short‑term rental coverage or endorsement as needed. [2][5]
• Tax registration and collection.
  • Wyoming imposes a 4% sales tax and 5% lodging tax on stays of 29 nights or fewer. Local sales and lodging taxes (county and any applicable city/district taxes) may also apply, varying by location and typically ranging 1–4% for lodging and 1–2% for sales. Administered through the Wyoming Department of Revenue. Register, collect, and remit these taxes on each reservation. [1]
• Operations setup.
  • Establish booking policies, guest screening, noise/occupancy rules, and on‑call response. Use a local manager if you are off‑site. Set up housekeeping, maintenance, and after‑hours guest support.
• Document compliance and renewals.
  • Keep a compliance file with building permit, CO, license/business registrations, tax registrations, neighbor communications (if applicable), and insurance proof. Track licensing renewals and tax filings.

Required documents, permits, licenses, and guidelines

• Building permit and certificate of occupancy (CO) for any ADU.
  • Pre‑Planning Application required before building permit; include site/floor plans, letter of intent, proof of ownership/authorization; proof of utility will‑serve letters with building permit; CO required prior to occupancy. [5]
• Zoning compliance and home‑based business compliance (as applicable).
• Short‑term rental license (home‑based business pathway) and restrictions.
  • Only one STR license per lot; owner must occupy one unit (primary or ADU) to operate an STR. [5]
• Business license(s) as applicable.
  • Separate business license required for each rental unit if renting long‑term; for STRs, treat as a home‑based business per city rules. [5]
• Fire and life safety compliance.
  • Compliance with city‑adopted building and fire codes; code‑specific requirements determined during permit/inspection. [2][5]
• Insurance coverage.
  • Obtain STR‑specific coverage or endorsement since personal homeowners policies may not respond to commercial STR activity. [2]
• Wyoming tax registration and filings.
  • Register with Wyoming Department of Revenue; collect and remit state and any applicable local sales and lodging taxes for stays ≤29 nights. [1]

Specific regulations: city, county, and state

• City of Sheridan
  • STRs are generally allowed as a home‑based business use in residential zones, subject to standard zoning, building, and fire codes. No city‑specific STR licensing fee schedule or dedicated permit is publicly listed; use the home‑based business pathway. [2]
  • ADU‑specific STR restrictions:
    • STRs are only permitted if the owner occupies either the single‑family unit or the ADU.
    • Only one STR license may be issued for the property (for either the primary dwelling or the ADU). [5]
• Sheridan County
  • As of July 2025, county‑wide STR regulations were not in place; county leaders have discussed options but did not enact county rules. Hosts must comply with state tax requirements and city rules where applicable. [3][4]
• State of Wyoming
  • No state‑level ban or comprehensive STR licensing framework. Regulations are primarily local (city/county).
  • Taxes: 4% Wyoming sales tax and 5% Wyoming lodging tax apply to stays of 29 nights or fewer, calculated on the total listing price (including cleaning and guest fees). Local sales tax (typically 1–2%) and local lodging tax (typically 1–4%) may also apply; these are administered by the Wyoming Department of Revenue. [1]

Local authority contacts and key information

• City of Sheridan (Zoning/Building/Permitting)
  • Address: City Hall, 55 Grinnell Plaza, Sheridan, WY 82801
  • Phone: (307) 672‑2481 (main line)
  • Building Permits: (307) 675‑4230
  • Website: ci.sheridan.co.us/
• Zoning Administrator (City of Sheridan)
  • Current administrator name not confirmed in provided sources; contact City Hall/Building Department to route to zoning. [4][5]
• Sheridan County (County Administration)
  • Phone: (307) 674‑2900 (county general line)
  • Website: www.sheridancountywy.gov/
• State of Wyoming (Taxes/Revenue)
  • Website: revenue.wyo.gov/
• Local news references on STR regulatory discussions
  • www.wyomingnews.com/news/local_news/leaders-consider-regulations-incentives-for-preserving-affordable-housing-as-short-term-rentals-expand/article_f9f6d9d2-1d45-11ef-87e6-6ffad6536a9c.html

Links to source pages (IMPORTANT)

• Hostaway: Airbnb Rules in Wyoming (state taxes and general Wyoming context) — www.hostaway.com/blog/airbnb-rules-in-wyoming/
• Summer: Vacation Rental Management in Sheridan, Wyoming (market and general city notes) — www.gosummer.com/vacation-rental-management/sheridan-wyoming
• Wyoming News: Leaders consider regulations/incentives for preserving affordable housing as short‑term rentals expand — www.wyomingnews.com/news/local_news/leaders-consider-regulations-incentives-for-preserving-affordable-housing-as-short-term-rentals-expand/article_f9f6d9d2-1d45-11ef-87e6-6ffad6536a9c.html
• City of Sheridan: ADU Ordinance (Draft Outline) — ci.sheridan.co.us/DocumentCenter/View/1507/Sheridan-ADU-Ordinance-Outline-PDF
• Wyo Stays: Navigating the Sheridan Rental Market (local STR activity context) — www.wyostays.com/navigating-the-sheridan-rental-market-wyo-stays-commitment-through-changing-times

Notes and practical implications for investors

• The current environment is permissive but structured. In an ADU configuration, you can operate an STR only if you live on site; you cannot short‑term‑rent a detached ADU as a standalone investment without residing in the primary home on the same lot. [5]
• For non‑ADU properties, treat the STR as a home‑based business; confirm parking, building/fire safety, and neighborhood compatibility. [2]
• Coordinate early with the Building Department on any ADU work and CO issuance; utility will‑serve letters and a clear Pre‑Planning Application will streamline approvals. [5]
• Because Wyoming’s STR rules are primarily local, monitor city and county for evolving discussions or new ordinances; county rules were not yet enacted as of July 2025. [3][4]

This guide is intended to inform investors and operators and does not constitute legal advice. For operational decisions and permitting specifics, consult the City of Sheridan’s Building and Planning departments.