Mark Pestronk
Mark Pestronk

Q: Our company isn't a travel agency but rather a new kind of company that arranges adventures and experiences at foreign destinations, such as bullfighting lessons in Spain. When a client or prospective client asks us for hotel recommendations, we provide them, and we offer to book the hotels. We typically work with a few travel agencies to make the bookings. I am concerned about the seller of travel laws in the various states. If we book through a travel agency that is a registered seller, do we also have to be registered?

A: There are five states with seller of travel registration laws: California, Florida, Hawaii, Iowa and Washington. All the states require registration if you sell to residents of those states regardless of your company's location, unless you qualify for an exemption from registration.

As a general rule, if your company falls within the definition of seller of travel or (in the case of Hawaii and Iowa) travel agency, then it does not matter whether another registered seller is involved in the chain of sale. You would have to register even if another registered seller of travel is actually making the hotel booking for you.

Two exceptions to the general rule are as follows: First, if a company meets all the criteria for an exempt independent contractor (IC) under the laws of California, Florida and Washington, it is exempt from registration. In your case, you would probably not qualify for the IC exemption because you handle and retain client money, among other reasons.

The other exception that can occur when you sell through an existing seller is this: If, on your website and in every solicitation and sale, you make clear that the seller of travel services is ABC Travel, then you will probably not need to register. In your case, this exception would not apply because you use different agencies and probably don't want to publicize another seller of travel.

At this point, you would need to examine the exact definition of seller of travel or travel agency in each of the five statutes to see whether you meet the definition. As you will see, it is not a foregone conclusion that you meet the definition.

Under the California law, seller of travel means a "person who sells, provides, furnishes, contracts for, arranges or advertises that he or she can or may arrange, or has arranged, wholesale or retail, either of the following: 1) Air or sea transportation either separately or in conjunction with other travel services; 2) Land or water vessel transportation, other than sea carriage, either separately or in conjunction with other travel services if the total charge to the passenger exceeds $300."

Notice the omission of hotels or other accommodations from the definition. So if the only travel-related services that you offer are hotels, you do not have to register in California.

In Florida, the definition is different. You are a seller of travel if you "offer for sale, directly or indirectly, at wholesale or retail, prearranged travel ... ."

In turn, "Prearranged travel ... includes, but is not limited to, car rentals, lodging, transfers and sightseeing tours and all other such services which are reasonably related to air, sea, rail, motor coach or other medium of transportation ... ."

Therefore, under the Florida statute, you must register even if all you do is offer lodging in connection with your other, nontravel activities.

These examples show that if you operate a nontraditional travel-related business, as so many new entrants do, you need to review each state's laws to decide if you need to register.

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