Would Tax Law Proposals Kill Travel Agencies in Some States?
Skift Take
As states look for new sources of tax revenue in the service-driven economy, businesses like travel agencies are viewed as likely targets. Part of the problem is ignorance among legislators of how agencies operate and why added taxes would be devastating for many.
Travel advisors in the U.S. states of Connecticut, Utah, and Nebraska are mobilizing for a fight against tax proposals they fear could put travel agencies out of business.
In Utah, a sweeping tax reform bill that would impose state sales taxes on travel agencies and others who provide professional services had been scheduled to go before the state legislature this month. Pressure from the business community, including travel advisors, has caused lawmakers to withdraw the proposal for consideration during the current session. However, the governor announced he may call a special legislative session this summer to address the issue again.
A similar proposal regarding “the gross income received for the services of travel agents and tour operators and for online travel services” is going before the state legislature in Nebraska.
In Connecticut, Governor Ned Lamont’s 2020 budget proposes to expand the state’s 6.5 per cent sales taxes to include “travel arrangement and reservation services.”
None of the proposals are clear on whether the new taxes would pertain to gross sales or only on service fees and markups provided to clients.
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