As part of its continuing efforts to defend agents against potentially damaging state legislative proposals, ASTA reports that a multifaceted grassroots campaign by ASTA and its members in Virginia has succeeded to influence several bills pending in the General Assembly that would impact the travel industry. ASTA praaised the strong response by ASTA members that included nearly 200 advocacy messages to legislators before the Assembly’s Feb. 23 adjournment.
“As state governments come under strong pressure to address budget shortfalls, the travel industry has become a target for anti-competitive taxes that threaten to undermine states’ overall tourism industries, as well as their budgets,” warns ASTA CEO Zane Kerby.
Among the bills considered by the General Assembly that would impact the travel sector:
• Sales Tax on “Travel Services” (SB717, HB1878 and HB2179) – Several bills were introduced to expand the Commonwealth’s 5 percent sales and use tax to a number of service industries, including “travel services,” with part of the proceeds going to transportation infrastructure. All three bills died in committee.
• “Travel services” were defined as those “related to selling travel, tour, and accommodation services to the general public or commercial clients.” The tax would be applied to the “gross sales” of such services – which would be devastating to Virginia travel agencies since so much of their gross income is made-up of so-called “flow-through” funds (funds that legally belong to travel suppliers such as airlines, hotels and cruise lines), ASTA notes.
• Hotel Occupancy Tax Bills (SB767 and SB1094) – These bills would have applied both county occupancy tax and state sales tax on the fees charged by “accommodations intermediaries” for facilitating hotel bookings. On Feb. 6 a House Finance Subcommittee voted nine to two to table (kill) the bill. Intermediaries – not just those in Virginia – would also have to register with state and local taxing authorities and be subject to detailed accounting and record keeping measures for each and every transaction.
• Travel Insurance Deregulation – Under the Virginia bill (HB2023), the Commonwealth would follow the NAIC/NCOIL standards, joining Calif, Fla, Idaho, Kan, Ky and Minn. HB2023 passed both the House and Senate unanimously in February and it awaits the Governor’s signature. Over the past few years, ASTA notes it has been working with the U.S. Travel Insurance Association (UStiA), the National Association of Insurance Commissioners (NAIC) and the National Conference of Insurance Legislators (NCOIL) to create to a set of state standards governing travel agents’ offering travel insurance to their clients, which will replace the outdated, confusing 50-state web of rules that costs each agent over $40,000 a year to comply with.
In working against these bills, ASTA reports it worked closely with allies such as the Travel Technology Association, the U.S. Travel Insurance Association and others garnering strong grassroots support from travel agencies, supplying them with a variety of tools to assist them in successfully making their voices heard by state representatives. In addition, ASTA member Mary Peters of Friendly Travel in Alexandria traveled to Richmond to testify against SB767, helping to ensure its defeat.
“Thanks to the exceptional hard work of ASTA members, like Mary Peters, and our allies at the grassroots level, we have been able to convince legislators not to pursue these proposals, saving local travel agents thousands of dollars in onerous and harmful new taxes,” Kerby said.
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