Mark Pestronk
Q: In last week's column, you covered the detailed definitions of "Seller of Travel" under the California and Florida laws. Does everyone selling to Californians or Floridians (and falling under the definitions) have to register with those states, or are there exemptions from registration?
A: Both states have complicated exemptions from registration. Although Hawaii, Iowa, and Washington also have exemptions, I am concentrating on the two states with the most active enforcement policies.
In California, a seller such as a home-based agency or tour operator does not have to register if it meets all seven of the criteria set forth in this column. In a nutshell, these seven are so strict that only sole proprietorships that are hosted by a registered seller can possibly qualify for an exemption.
If you are not exempt, then you must not only register, but you also must open a trust account or post a surety bond. If you use the trust account option, you have to put all payments from Californians into the account if you hold their funds.
To complicate matters, although you may have to register, you may be exempt from the trust account or bond requirement if you meet all the following criteria: you sell only from locations in California; you are appointed by ARC; you forward passenger funds directly to ARC, a carrier, or another registered seller of travel; you have been in business under the same ownership for a period of three years; and you arrange air or sea transportation or travel services only at retail directly to the general public and not through any other seller of travel.
The California forms can be found here.
If you must register, and if you have your principal place of business in California or you have a publicly traded company, you must also become a participant in the California Travel Consumer Restitution Corp., and its forms are here.
In Florida, you can be exempt from registration in two ways: First, if you issue airline tickets and have been appointed by ARC for the most recent three years under the same ownership and control and you do not offer vacation certificates. If you qualify, you need to get a letter from the state government and keep it on file.
Second, if you are an independent contractor of a Florida-registered seller, you can be exempt if you sell on behalf of a registered seller under a written contract; do not receive fees directly from clients; and do not at any time have any blank ticket stock or the ability to issue tickets, lodging or vacation certificates, or any other travel documents. If you qualify for this exemption, you must file an annual "Statement of Exemption" and pay a $50 fee.
If you are not exempt, then you must not only register but also obtain and file with the state a performance bond of $25,000, which can be reduced to $10,000 for startups.
Finally, if you are not located in Florida, you must be authorized by the Florida Secretary of State to do business in Florida before you can register as a seller of travel.
The Florida forms are here.