Two Wins and Two Losses for Travel in the New U.S. Budget Bill

The July 4 signing of U.S. President Donald Trump’s massive budget bill brought both wins and losses to travel. Here are the new tax and spending provisions impacting travel advisors and the industry at large. 

Win: Permanent Tax Deductions

A valuable tax break for travel advisors, which was set to expire at the end of the year, was made permanent in the spending bill. Section 199A tax deduction allows many small businesses, including travel advisors, to deduct 20% of their qualified business income. It also raises the income limits to $75,000 for individuals, and $150,000 for couples who file jointly. 

The American Society of Travel Advisors (ASTA) had championed the extension of this deduction. Without it, the “increased tax burden would significantly impact their business. Some even informed us that it would affect their ability to employ staff or compete with other travel agencies and could affect the travel industry as a whole,” ASTA President Zane Kerby said when its future was unclear. 

Win: Savings Plan Update

The budget bill also expands qualified expenses under the 529 savings plans to include postsecondary training and credentialing, which includes ASTA’s Verified Travel Advisor certification. 

“Expanding the permissible use of 529 plan funds beyond traditional college costs means professionals can choose the training that best suits their goals,” said Jessica Klement, vice president of advocacy at ASTA. “It is a common‑sense update that will strengthen the travel advisor profession.”   

Loss: Brand USA Takes Funding Hit

Brand USA, the country’s destination marketing organization, had its federal matching funds slashed in the budget reconciliation bill, from $100 million to $20 million.  

“While we are disappointed with the reduction, Brand USA remains committed to our mission and looks forward to opportunities for funding restoration in the future,” said Fred Dixon, Brand USA’s president and CEO. “In the meantime, we remain fully engaged and in deep dialogue with every level of the administration. We take confidence in the President’s request for Brand USA’s full funding in FY26 and look forward to Congress taking up those appropriations later this fall.” 

He added that the reduction will require Brand USA to significantly reorganize its resources, in a manner still to be determined. The organization, which launched in 2010, has generated $8.3 billion in tax receipts, returning $20 to the U.S. economy for every dollar spent, it reports. 

“We remain focused on growing legitimate international inbound travel and the vital boost it provides to the U.S. economy, especially with major global events on the immediate horizon like America250 and the FIFA World Cup,” Dixon said. “We thank the industry for their unwavering support of Brand USA throughout this entire process.”  

U.S. Travel Association President and CEO Geoff Freeman also expressed disappointment at the decrease in Brand USA funding, calling it “a missed opportunity—especially as the administration seeks to maximize a historic slate of global events on American soil.” 

Loss: ATC Funding Won’t Cover Duffy’s Proposal

Air traffic control (ATC) modernization is top of mind for travel in the United States. U.S. Transportation Secretary Sean Duffy’s plans to overhaul the country’s ATC systems would cost around $20 billion, and airlines and aerospace companies say the upgrades will cost $31 billion, according to Reuters.  

Trump’s spending bill allots just $12.5 million. Duffy had pushed Congress for an additional $8 billion to $9 billion but was unsuccessful. Still, travel industry leaders have praised the funding as “a giant step in the right direction.” 

“Bold, necessary investments in air traffic control and Customs and Border Protection will make a meaningful difference in the traveler’s experience,” Freeman said. 

Duffy’s ATC proposal includes upgrading aging radar systems and air traffic control towers, as well as hiring 2,000 new controllers by offering 20% salary bonuses. “Without modernization efforts – including upgraded technology, improved air traffic management, and enhanced safety measures – the risk of system failures, disruptions, and security vulnerabilities will only increase,” he said in the proposal.