Q: Our agency is moving to a smaller office, so we want to throw out as much paper as we can. What documents are we legally required to keep and for how long? Now that we can get ticketing records through ARCs Compass service, do we still have to retain any paper relating to ARC sales?

A: ARC still requires you to keep the following papers for two years after issuance: universal credit card charge forms, debit and credit memos, agent automated deductions (AADs), prepaid ticket advice (PTA) refund documents, discount certificates and vouchers, value coupons associated with refunds and voids, agent coupons for manual tickets and other documents that ARC or a carrier may require.

ARC also requires you to retain the following either on paper or in your computer for two years after the applicable sales report was due: a copy of each sales report, each sales summary, each Interactive Agent Reporting (IAR) exception report, a copy of each IAR confirmation screen and all voided traffic documents.

The IRS requires you to keep your records of revenue and expenses for three years after you file your tax returns.

There are several exceptions to the three-year rule. Withholding tax records must be kept for four years after the date the tax is due or is paid, whichever is later.

If you claim a bad-debt deduction, you need to keep the records for seven years. When you buy assets, you need to keep the purchase records until three years after you sell or finish depreciating them, whichever is later. Finally, if you dont file tax returns, dont report more than 25% of your income or commit tax fraud, you cant throw away anything that pertains to what you should have reported.

For all other business transactions, you need to refer to your states statute of limitations on written contracts. Statutes of limitations are different in each state. For written contracts, they vary from as little as three years in Maryland to 15 years in Ohio, but the average is about five years.

You can find your states rule at www.fair-debt-collection.com/SOL-by-State.html#26.

Generally, you can start counting the years when the contract ends. However, correct counting can be tricky, especially if several states are involved, so you should consult a lawyer to see when the statute begins to run.

Remember that an airline can try to collect on a debit memo up to your states statute of limitations on contracts. Therefore, you are probably better off keeping the records required by ARC for the period mentioned in the previous paragraph, so that you can defend against debit memos, as it is no defense to say that you dont have records because ARC allowed you to throw them away.

Your states statute of limitations on contracts should also be your nonmandatory guideline for other business papers, such as bank statements, office leases, equipment leases, GDS contracts, payroll records, personnel records and all correspondence.

Here are business records that you need to keep permanently, meaning beyond your lifetime: real estate purchases, incorporation documents, bylaws, minutes, stock certificates and stock ledger.

Mark Pestronk is a Fairfax, Va.-based attorney specializing in travel law. He answers your questions in the TravelWeekly.com Legal Ease forum. To contact Pestronk directly, e-mail him at [email protected].

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