ASTA's 2015 Legislative Agenda: It's Going to Be a Busy Year
by Barbara Peterson /Fighting new taxes and regulations on travel agencies is a top legislative priority for ASTA in 2015, according to Eben Peck, VP Government Affairs.
That’s one of five main goals on ASTA’s just-released advocacy agenda, which also includes ensuring transparency in airline fare and fee transaction as well as easing regulation burdens on the industry.
Peck said, however, that the tax issue was among the most critical for the new year, as financially strapped statehouses look for ways to raise revenue.
The fight on sale taxes
In the last few years, ASTA has successfully fought attempts by at least five states to subject agencies to state sales taxes.
But there may be even more of these battles in 2015 as new legislators and governors are seated in state capitals.
This year is also a budgeting year for most states so ASTA expects to see a rash of revenue raising proposals typically characterized by proponents as “modernizing” state tax codes or closing “loopholes” on hotel taxes.
“The most broadly written of these would tax travel agency gross sales at 5% or 7% or more,” said Peck.
If these become law, and are implemented as written, “it would put a lot of agents out of business overnight, or force them to leave the state,” he said.
Maine: the latest battleground
ASTA, in fact, has just learned of a new plan in Maine to broaden the reach of state sales taxes to include agents among a host of service sector businesses that would no longer be exempt from the levy.
The ostensible reason behind the expansion: It would be used to offset a proposed reduction in the state income tax.
Another trend is for states to try and impose local and state lodging taxes on hotel “intermediaries,” including travel agencies.
Currently, at least two states, Virginia and Maryland , are considering taking up the hotel tax expansion.
State taxes aren’t the only ones ASTA is worried about.
At the federal level, ASTA is joining the car rental industry to support legislation that would pre-empt state and local governments from imposing new levies on rental car transactions.
Other hot issues for 2015 include:
Airline fares and ancillary fee transparency: ASTA is working with the Department of Transportation (DOT) to make clear that its rulemaking proceeding on ancillary fees would ensure that agents and consumers have access to, and can purchase, add-ons like checked bags at the time of booking.
ASTA said this parity is especially important as airline “unbundling” of fares accelerates, making it more difficult for agents and consumers to comparison shop.
On a related topic, ASTA is working to fend off legislative attacks on the DOT’s rule requiring full disclosure of the total cost of an airline ticket, with taxes and mandatory fees included.
That rule has been in effect for several years, but an airline-backed bill to overturn it cleared the House of Representatives last session. It may get a second chance in the Senate under new leadership this year.
ASTA said it’s already aware of airline efforts to insert a rollback of the advertising rule into a “must-pass” bill to reauthorize the Federal Aviation Administration (FAA), the latter being a high priority for the new Congress. That legislation is essential to ensuring the air traffic control system will be maintained and funded in coming years—making it an attractive vehicle for attaching special interest provisions.
Reducing regulatory burdens: While new regulatory schemes are likely to meet a hostile reception in a Republican-controlled Congress, Peck said ASTA is still watching out for anything that would pile on the red tape.
Several pending bills would step up federal oversight of the cruise industry (most likely in response to the recent string of high profile incidents) and these bills would add disclosure burdens for agents who sell cruises as well as impose stiff financial penalties for non-compliance, Peck said.
ASTA also will work to overturn one of the more egregious examples of this type of regulation – a 2012 law requiring travel sellers to notify clients if they are booked on an aircraft that may be sprayed with insecticides.
Travel facilitation: High on ASTA’s the list is expansion of TSA’s popular PreCheck program giving members who pass muster expedited security checks as well as broadening Customs’ Global Entry program for returning international travelers.
ASTA is also backing the “JOLT” act (Jobs Originated through Landing Travel), which would streamline the visa process for inbound visitors and help the U.S. boost international arrivals. These have suffered in recent years due, in part, to heightened security and additional red tape for foreigners.
Easing of Cuba travel restrictions: President Obama’s recent decision to restore diplomatic ties with Cuba has sparked a surge of interest in traveling to the once forbidden nation. For now, however, tourism is off limits for most U.S. citizens while the 50-year-old trade embargo remains in place.
ASTA will lobby Congress for a full repeal of the ban and, in the meantime, for the Administration to allow all travel agents to book trips for Americans currently allowed to travel to the country (usually as part of a group authorized to go for humanitarian, religious or other reasons.)
Other issues likely to surface in the new Congress are a possible crackdown on use of independent contractors, which could affect the estimated 40,000 travel agency workers who fall into that category. But the change in control in Congress could diminish support for that one, Peck said.
ASTA said it will also continue to keep an eye on key issues that were on the front burner last year, such as state travel insurance licensing. Nineteen states plus the District of Columbia have yet to pass a uniform law backed by ASTA and the U.S. Travel Insurance Association (USTiA).