Travel industry groups have joined together to fight what is
becoming a biennial event nationwide: proposed taxes on travel services.
As of last week, Connecticut, Utah and Nebraska had all
proposed taxing travel services, moves panned by ASTA and the Travel Technology
Association (Travel Tech), the trade group for OTAs, GDSs, metasearch sites,
travel management companies and short-term rental platforms.
Eben Peck, executive vice president of advocacy for ASTA,
said the Society expected the proposed taxes to pop up. It's an odd-numbered
year, which is when many states introduce budgets spanning two years, many of
which call for new taxes.
Peck said ASTA believes all of the budgets with proposed travel
services taxes have been introduced, but it’s always possible that some more will
crop up. Of the three, the most in need of urgent attention was Utah, where the
legislature was attempting to finalize a budget before it adjourns on March 14.
However, the vote on Utah’s tax reform plan was postponed. Peck said the sales tax
expansion was moved to a task force; it could be heard before a special session
of the legislature around June.
Nebraska and Connecticut, on the other hand, will not
adjourn until June, giving ASTA and its members more time to argue against the
Brian Hollien, president of Morris Murdock Travel in Salt
Lake City, has been actively opposing Utah's proposal, which would levy a 3.1%
tax on "amounts paid or charged for services," according to language
in the bill. He testified before the state's House of Representatives, and
Morris Murdock employees have spent recent days meeting with legislators.
Hollien said agencies in Utah are up against the clock in this particular
"We've had so little time to reach out to
representatives and senators," he said. "Most of them haven't even
read the bill."
ASTA's main arguments against the proposed taxes are that
advisors already pay income taxes on their revenue. Agents are also different
from other service providers subject to the proposed tax as their competition
is both inside and outside the state, and taxing travel services in Utah would
disadvantage agencies there vis-a-vis their out-of-state counterparts who don't
have similar increased costs and administrative work.
ASTA has set up online "grassroots portals" where
residents of the states with proposed taxes can send emails to legislators or
get phone scripts. Peck said response has been good.
Travel Tech is fighting the proposals, too, in addition to
other tax legislation that specifically affect its members, such as proposed
taxes on short-term rentals.
First, president Steve Shur said, the association educates
itself about what the legislature is hoping to accomplish. Then, Travel Tech
works with lobbyists to demonstrate what harmful policies would look like if
passed and what the effect would be on the tourism economy and consumers.
ASTA and Travel Tech partner on issues that affect members
of both groups. The groups share information and resources, Shur said, and meet
with legislators jointly.
"We're happy to work closely with [ASTA], arm-in-arm,
against these discriminatory taxes, which I think are just short-sighted by the
states," he said.
In addition to state-level tax issues, the two groups have
also cooperated on national issues such as the recent FAA Reauthorization Bill.
"It's intelligence-sharing," Peck said. "Some
of these fights are so urgent that you need to get as many stakeholders engaged
as possible. It's kind of a strength in numbers thing."
Only time will tell if ASTA and Travel Tech will win their
fight against the recent spurt of proposed taxes, but the track record is good --
the Society has knocked down every proposal in recent years, Peck said -- and
the toolkit to oppose taxes is already in place.
"We've won these fights in multiple states," Peck
said. "If ASTA wasn't here, you'd have to be re-creating the wheel in
state after state."