Washington State Legislature Kills Tax Hike on Travel Agents

cashThe American Society of Travel Agents (ASTA) reports it is praising its Washington state members and allies for their grassroots efforts in the wake of the Washington state legislature’s decision to keep in place a special tax rate for travel agent commission income.

ASTA said its members helped to kill this proposal by aggressively making their case to legislators through phone calls, face-to-face conversations and emails, including more than 280 advocacy messages sent through ASTA’s online grassroots site. 

“Thanks to the hard work of Washington ASTA and NACTA members, travel agents in Washington have avoided millions in new taxes, as well as being put at a competitive disadvantage with agents in other states,” said ASTA President and CEO Zane Kerby. “We applaud both their efforts and the legislature’s decision not to target the travel sector with new taxes.” NACTA is the National Association of Career Travel Agents.

Since the 1970s travel agents and tour operators in the State of Washington have paid a reduced state business and occupation (B&O) tax rate of 0.275 percent on parts of their income, ASTA said.  

This rate applies to agents’ commission income only – everything else is taxed at the general service rate of 1.5 percent. This preferential rate was put into place in 1975 to reflect the fact that much of the travel agents arrange for their clients is interstate travel – something states are not allowed to directly tax under federal law.  

Legislation was included in the Washington House of Representatives’ version of the state budget that would undo this special rate, meaning agents would pay the general service rate of 1.5 percent on commission income. This rate would be more than five times the current one, and would cost agencies an estimated $11.7 million between 2013 and 2015. However, the final version of the budget, passed by the legislature late last week and signed into law on Sunday, would keep the 0.275 rate intact.

Washington travel agents, including both ASTA and NACTA members, played a critical part in the fight to defeat this ill-considered scheme, which included 88 people using ASTA’s online grassroots site to send a total of 282 advocacy messages to state legislators, as well as phone calls and face-to-face conversations. 

Robert Roach of Roche’s Travel in Bellevue, President of ASTA’s Pacific Northwest Chapter, helped to organize the grassroots campaign at the ground level while Angie Lepley and Jodene Rohde of ASTA Premium member Tangerine Travel in Bothell led the early opposition to the proposal. 

ASTA said it worked closely with Washington-based ASTA Corporate Advisory Council member Expedia, Inc., to educate policymakers about the impact of the tax increase on both large and small agencies, and also conducted outreach to NTA and the U.S. Tour Operators Association, both of whose members would have also been impacted by the change.

“ASTA has enjoyed a string of advocacy successes this year at the state level, and we couldn’t do it without a strong partnership with chapter leadership and members in the affected states,” said Kerby.  “As such, credit for this latest victory is due to Washington ASTA members and all the agents who participated in the grassroots campaign.”

Visit www.asta.org

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