Q: In last week's column, you discussed what independent contractors (ICs) must do to be exempt from registration under the California Seller of Travel law. Do other states also have exemptions for ICs, and if so, what are the qualifications for exemption? Do those laws apply only to in-state sellers, or do they apply to out-of-state sellers who have clients in those states?
A: Only five other states have any registration law for sellers of travel: Florida, Iowa, Nevada, Washington and Hawaii. Each state's law is different, but none is as complicated as California's law.
ICs who are located in Florida must register as sellers of travel under the Florida Seller of Travel law if they do any one or more of the following:
- Work without a written contract or work with a contract with a host not registered in Florida that is required to register there.
- Receive fees from clients.
- Possess blank stock or have the ability to issue travel documents.
Conversely, ICs do not have to register in Florida if they do all of the following:
- Have a written contract with a host that is registered in Florida (or is exempt from registration by virtue of having an ARC appointment under the same ownership for more than three years) and is in compliance with the law.
- Refrain from receiving fees from purchasers.
- Refrain from possessing blank ticket stock or having the ability to issue documents.
In Florida, unlike in California, exempt ICs need to file an annual "statement of exemption" and pay a $50 filing fee. You can find the form at www.800helpfla.com/sotbus.html.
Note that, if you are located outside Florida, you are subject to the law if you sell travel to individuals or groups located in Florida. So if your host is located outside and does not sell to Floridians, but you do, you are not exempt and must register as a seller of travel.
Under the Washington state statute, an IC hosted by a registered seller of travel is exempt if:
- The IC is conducting business as a seller of travel "in the name of and under the registration of" the registered seller of travel.
- All money is collected "in the name of the registered seller of travel and processed by" the registered seller of travel.
Exempt ICs do not need to file anything with the state. As with California and Florida, the law applies to nonresident sellers who solicit business from Washingtonians, but the law exempts sellers who advertise only in national media, such as the Internet, as long as they do not actually sell to Washingtonians.
Hawaii's travel agency registration law has no exemption for ICs, and it does not distinguish in-state from out-of-state sellers.
Iowa likewise has no exemption for ICs, and it specifically requires registration by out-of-state sellers who offer to arrange or sell travel to Iowans.
Finally, the office in charge of the Nevada Seller of Travel law has been shut for four years in a government-streamlining push and is scheduled to reopen for business on July 1. If it reopens, I will cover the law's requirements in a future column.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].