SAN FRANCISCO -- The California travel industry threw its support behind a proposal in the state legislature to give tax relief to travel agencies and other travel companies that have suffered losses in the aftermath of Sept. 11.

The measure, Senate Bill 1286, was introduced earlier this year by State Sen. Raymond Hayes (R-Riverside) and is scheduled to be discussed before the Senate's Revenue and Tax Committee April 10.

It would bring the California tax code in line with current federal tax law by allowing owners of travel companies to deduct 100% of their net operating losses incurred during the period Sept. 1, 2001 and Jan. 1, 2004, and allow taxpayers to spread those losses over a 20-year period following the year in which the net operating loss was deducted.

"It has the potential of enabling travel businesses which were on the brink of closing to stay in business," said Diane Embree, president of the California Coalition of Travel Organizations, a trade group of ASTA chapters, agency groups, tour operators and other travel firms in the state.

The CCTO, which retains a lobbyist in Sacramento, recently issued a statement that it will support the Senate bill. It urged travel agents and others in the industry to write letters in support to their state legislators.

Embree said that the bill, if passed, could be "very important" to travel agency owners, providing them with enough financial relief to rehire laid off employees.


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