March 25, 2015
Alexandria, VA – American Society of Travel Advisors (ASTA) President and CEO Zane Kerby issues this statement in response to the Maryland Senate’s party-line passage yesterday of legislation (SB 190) that would apply the state’s six percent sales tax to the service fees and other markups “accommodations intermediaries” charge their clients for booking Maryland hotel rooms:
“ASTA is disappointed by the Maryland Senate’s passage of Senate Bill (SB) 190, which would apply new taxes to the services travel agents provide to their clients, and now calls on the House of Delegates to oppose it and any similar measure.
“As with similar bills across the country, this is being described in Annapolis as something that is all about the big online travel agencies (OTAs). However, the word ‘online’ is nowhere to be found in the legislation. Instead, it clearly gives taxing authorities the ability to go after travel agents of all shapes and sizes, online or offline – including the 226 Maryland agencies that employ more than 1,100 people, according to the U.S. Census.
“The fees these agents charge their clients are for a service – saving consumers time and money by helping them navigate a travel marketplace that offers an overwhelming number of options and choices. Our long-held position is that this service fee revenue should not be subject to taxes traditionally applied on hotel room stays.
“Let’s be clear – travel agents pay their fair share in taxes. This service fee income is already subject to federal and state income taxes. Imposing sales tax on this revenue would amount to ‘triple taxation’ and creates a disincentive for agents to spend their time and resources to bring people to the State of Maryland.
“Contrary to the misplaced notion that travel agents are a dying breed, travel agencies that have adapted to the Internet era have not only survived but have thrived. Part and parcel of that evolution has been a shift in business model, from one based on commissions to one based on fees. Simply put, traditional travel agents do the things the OTAs do and thus will be impacted by bills such as SB 190.
“We strongly urge the House of Delegates to oppose SB 190 and its House counterpart, which would impose new taxes and red tape on the independent travel distribution channel upon which so many Marylanders rely.”
Rebranded in 2018 as the American Society of Travel Advisors, ASTA is the leading global advocate for travel advisors, the travel industry and the traveling public. Its members represent 80 percent of all travel sold in the United States through the travel agency distribution channel. Together with hundreds of internationally-based members, ASTA’s history of industry advocacy traces back to its founding in 1931 when it launched with the mission to facilitate the business of selling travel through effective representation, shared knowledge and the enhancement of professionalism. For more information about the Society, visit ASTA.org. Consumers can connect with an ASTA travel advisor at TravelSense.org.