Search Travel Market Report

mainlogo
www.travelmarketreport.com
U.S.A.
English
Canada
English
Canada Quebec
Français
  • News
  • Packaged Travel
  • Cruise
  • Hotels & Resorts
  • Destinations
  • Retail Strategies
  • Air
  • River Cruise
  • Training & Resources

Texas is Latest State Legislature to Propose Taxing Travel Advisors

by Richard D’Ambrosio  May 07, 2019
Texas is Latest State Legislature to Propose Taxing Travel Advisors

Texas is the latest state legislature proposing a tax law that would impact travel agents. Photo: Shutterstock.com.

Texas became the latest state legislature proposing a tax law that would impact travel agents, causing the American Society of Travel Advisors (ASTA) to launch yet another grassroots lobbying campaign to protect the bank accounts of professional advisors.

In an analysis of H.B. 3579, published by the Texas State Legislature’s House Ways and Means Committee, “It has been suggested that the rights and duties of individuals who are or engage with a third party that is not a hotel for the purpose of reserving a room or space in a hotel are unclear with regard to tax calculation, collection and remittance obligations under current law.” This lack of clarity, as the state calls it, has led to a bill that will ensnare small travel agencies.

According to ASTA, the way House Bill 3579 is currently written, the state’s 6% hotel tax would be applied to travel agency “service fees and markups” connected to Texas hotel bookings. The current bill seeks to make the rule effective Jan. 1, 2020.

“While aimed at the big OTAs, the bill makes no distinction between online and offline or OTA versus brick-and-mortar agency, but simply expands the taxable amount of a Texas hotel booking to include ‘charges for reserving or booking the room or space,’” ASTA said in an email briefing Monday.

“If you live in Texas, please take two minutes out of your day to email or call your legislators through our grassroots portal below and fight this new tax. Thank you!”

The U.S. Bureau of Labor Statistics estimates that there were approximately 4,680 travel agents in the state of Texas in May 2018. It isn’t clear how many of those agents are independent owners, and how many are employees working for a travel agency.

Challenging spring
ASTA, its members, and professional advisors across the country have spent a good portion of the first half of 2018 putting out state tax fires around the country, including Connecticut, Nebraska, Utah and Washington.

Eben Peck, ASTA executive vice president, advocacy, told Travel Market Report that the proposed tax laws “were not entirely unexpected — it’s an odd-numbered year and those are years state legislatures typically consider their two-year budgets. At the same time, states are always looking for new revenue, and they think that in targeting the travel industry, they are targeting out-of-town visitors and thus ‘exporting’ their tax burden. The opposite is true — in-state businesses are the ones harmed by this discriminatory taxation.”

In Connecticut, Gov. Ned Lamont has proposed a 2020 budget that includes expanding the state’s 6.35% sales tax to personal and professional services, including “travel arrangement and reservation services.” Agents are still waiting to see if the tax would be applied to agency gross sales or only to service fees and markups charged to clients.

Related Articles

ASTA Looks to Repeat Success on Proposed Travel Agent Taxes
 

According to ASTA, each of Connecticut’s 236 retail travel agencies would incur an additional $7,600 in annual taxes. Connecticut agencies employ about 1,750 people.

“It has certainly been a challenge this spring, with state tax fights in multiple states,” Peck said. Rallying to ASTA’s numerous calls, members and agents have testified at hearings, placed phone calls and sent emails, and held face-to-face conversations with legislators.

“We are heartened by the response of ASTA members to these campaigns,” Peck said. “We have had multiple members testify in legislative committee hearings this spring and close to 1,800 messages have been sent through our grassroots portal.”

“Put simply, this is why you have a national trade association — we have fought these fights in state after state, and local advisors don’t have to recreate the wheel when they are targeted with tax increases. With our members’ support, we intend to keep fighting these proposals and keep travel advisors the thriving part of their states’ economies they are today,” Peck said.

In Washington state, ASTA and its members helped defeat a business tax proposal that would have resulted in a six-fold tax increase (from 0.275% to 1.5%), and was estimated to cost travel agencies in the state more than $14 million a year. The final version of the law, passed in April, kept the rate for agencies earning less than $250,000 at the 0.275% rate, while the rate for those earning more than $250,000 annually is 0.9%.

Meanwhile, agents in Utah are waiting to see if GOP lawmakers and Gov. Gary Herbert will revisit an unpopular measure that made the rounds of that state capital in March. The so-called “tax reform” bill would have imposed state sales taxes on travel agencies and other entrepreneurs who provide professional services (such as barbers).

Speaking before the House Revenue and Taxation Committee, Brian Hollien, president of Morris Murdock Travel, in Salt Lake City, testified how a tax on agents could drive some clients to purchase travel directly from airlines or hotels, or even from agencies outside of Utah.

Connecticut agency owners have made similar pleas to legislators and staff, debating that state’s proposal in Hartford.

  
  

MOST VIEWED

  1. Air Transat Pilots Strike Imminent as Flight Cancellations Begin Before Wednesday Deadline
  2. Jamaica Isn’t Destroyed: Tourism and Resorts Rise Strong after Hurricane Melissa
  3. Finishing Strong: How Travel Advisors Are Closing 2025 to Crush 2026
  4. Sandals Reopens Five Jamaica Resorts Weeks After Hurricane Melissa
  5. 9 New All-Inclusive Resorts in the Caribbean and Mexico Opening in 2026
  6. Black Friday Travel Deals: Sales & Promos Roundup for 2025


TMR Subscription

Subscribe today to receive daily in-depth coverage from all corners of the travel industry, from industry happenings to new cruise ships, hotel openings, tour updates, and much more.

Subscribe to TMR

Top Stories
Direct Travel Promotes Christine Sikes to Chief Operating Officer
Direct Travel Promotes Christine Sikes to Chief Operating Officer

Christine Sikes joined Direct Travel as senior vice president of operations in 2014.

Virtuoso Names Alyssa Bushey as SVP, Global Marketing
Virtuoso Names Alyssa Bushey as SVP, Global Marketing

Before joining Virtuoso, Alyssa Bushey was founder and CEO of luxury and hospitality marketing consultancy Edison 360.

Branded Merch for Travel Agencies: What Works (& What Doesn’t)
Branded Merch for Travel Agencies: What Works (& What Doesn’t)

Travel advisors spoke with Travel Market Report about their unique branded merchandise strategies.

Travel Planners International to Launch New Luxury Division in 2026
Travel Planners International to Launch New Luxury Division in 2026

TPI advisors can soon apply to be in the first cohort of the host agency’s new Luxe House.

What Travel Advisors Need to Know About the Destination Weddings Boom
What Travel Advisors Need to Know About the Destination Weddings Boom

Destination wedding specialists on the top destinations, most unusual requests, and top selling strategies.

Internova Travel Group Changes Partner Relations Structure, Executive Roles
Internova Travel Group Changes Partner Relations Structure, Executive Roles

The changes were announced by Internova on Tuesday.

TMR OUTLOOKS & WHITE PAPERS
View All
Advertiser's Voice
Curate Your Client’s Vacation in The Palm Beaches, Florida
About Travel Market Report Mission Meet the Team Advisory Board Advertise Syndication Guidelines
TMR Resources Calendar of Events Outlook/Whitepapers Previous Sponsored Articles Previous This Week Articles
Subscribe to TMR
Select Language
Do You Have an Idea Email
editor@travelmarketreport.com
Give Us a Call
1-(516) 730-3097
Drop Us a Note
Travel Market Report
71 Audrey Ave, Oyster Bay, NY 11771
© 2005 - 2025 Travel Market Report, an American Marketing Group Inc. Company All Rights Reserved | Terms and Conditions
Cookie Policy Privacy Policy Manage cookie preferences