May 1, 2019
ASTA Members Instrumental in Grassroots Campaign to Save Industry $14 Million Annually
Alexandria, VA, May 2, 2019 – In the wake of a vigorous campaign waged by the American Society of Travel Advisors (ASTA) and its Washington state members, the Society is applauding the Washington legislature for its decision to keep in place a reduced tax rate for travel agencies with new allowances for small businesses.
ASTA members played a critical role in opposing a proposal to repeal the special rate, which would have cost Washington travel agencies over $14 million annually, including testifying at hearings and making their case through phone calls, face-to-face conversations and emails, including over 600 advocacy messages sent to state policymakers through ASTA’s online grassroots site.
“Thanks to the hard work of Washington ASTA members, travel advisors in Washington have avoided millions in new taxes and being put at a competitive disadvantage with agencies in other states,” said Eben Peck, ASTA Executive Vice President, Advocacy. “While we would have preferred the tax rate to remain the same for all Washington agencies, we applaud these advocacy efforts and the legislature’s decision not to go through with a six-fold rate increase on Washington travel advisors.”
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 their income. The rate was put in place in the 1970s in recognition of the fact that much of the travel advisors arrange for their clients is interstate or international travel – something states are not allowed to directly tax under federal law.
Earlier this year, multiple pieces of legislation were introduced in the legislature to undo this special rate, meaning advisors would pay the general service rate of 1.5 percent. This would be more than six times the current one, and would cost agencies an estimated $14.5 million per year in new taxes. After a robust ASTA grassroots campaign, including two rounds of in-person committee testimony by ASTA members, legislators made substantial changes to the legislation. The final version, passed on April 28 just before the legislature adjourned for the year, maintains a special B&O rate for travel advisors, but modified such that those agencies earning less than $250,000 annually will remain at the 0.275 percent rate and those earning more than $250,000 annually will pay at 0.9 percent.
Washington members of ASTA and the ASTA Small Business Network played a critical part in the fight to defeat this massive tax increase, which included 145 people using ASTA’s online grassroots site to send a total of 609 advocacy messages to state legislators, as well as phone calls and face-to-face conversations. Dan Smith of Travel by Dan/Caribbean Adventures (twice), Shawn Van Der Putten of Exquisite Travel Group and Ann Chamberlin, ASTA’s SVP Membership & Strategic Partnerships all testified in committee hearings, while ASTA Greater Seattle Chapter Wendy Denny of Dream Vacations/Pinnacle Cruise and Tour helped to organize the grassroots campaign at the ground level. At the same time, ASTA headquarters worked closely with Washington-based member company Expedia and with consortia partners with Washington members such as American Express, Hickory Global Partners, Signature Travel Network, TRAVELSAVERS, Virtuoso and WESTA.
“We didn’t get everything we asked for in Washington, but the fact of the matter is ASTA member efforts this spring ensure that agencies in the state – members and non-members alike – will collectively pay $14 million less in tax every year,” said Peck. “Advocating for travel advisors at all levels of government is a core part of ASTA’s mission, and anyone who wants to be part of this unified effort should join ASTA today.”
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.