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ASTA and NTA Support New SBA StandardDecember 12, 2011 By: George Dooley Travel Agent
A proposed increase in the small-business size standard for travel agencies and tour operators won support from ASTA and the National Tour Association (NTA). The proposal would raise the small-business threshold from its current level of $3.5 million in revenue for travel agencies and $7 million for tour operators to that of $19 million. The two groups submitted comments in response to the Small Business Administration's (SBA) Notice of Proposed Rulemaking (NPRM).
“ASTA strongly supports the move to up the size standard for small businesses as many travel agencies continue to be impacted by the economic slowdown,” said ASTA CEO Tony Gonchar. “By providing a greater number of U.S. travel agencies with access to the many pro-business benefits allowed under the SBA, the SBA is, in effect, giving these agencies a stronger foothold in which to strengthen their business and preserve American jobs.”
In addition to a proposed increase in the threshold, the SBA asked for comments as to whether pass-though funds should continue to be excluded when considering business revenue. By means of response, ASTA wrote:
“Agency revenue is a far better measure of size than gross travel sales which are affected by a multitude of economic factors unrelated to the scale of the agency’s business. … Travel agencies do not have inventory for resale and may serve a variety of markets and customers with different price points and thus the total of sales have no direct relation to the scale of the business. With historically low profit margins, firms can sell a lot of travel but still be very small in scale, and it is that scale that SBA policy should and does sustain, especially but not exclusively in the difficult economic times that have prevailed for some years.”
ASTA found that 73 percent of its members report that they recognize as “business receipts” for federal income tax purposes only the commissions, fee and other ancillary income items that are true “income for tax purposes” to the firm.