AGENTS BLOCK TAX RISE

ASTA is praising its Washington state members and allies for their grassroots efforts in the wake of the Washington legislature’s decision to keep in place a special tax rate for travel agent commission income. ASTA members helped to kill this proposal by aggressively making their case to legislators through phone calls, face-to-face conversations and emails, including more than 280 advocacy messages sent through ASTAÆs online grassroots site. Zane Kerby, ASTA president and CEO, said: “Thanks to the hard work of Washington ASTA and NACTA members, travel agents in Washington have avoided millions in new taxes, as well as being put at a competitive disadvantage with agents in other states. We applaud both their efforts and the legislature’s decision not to target the travel sector with new taxes.” Since the 1970s travel agents and tour operators in the State of Washington have paid a reduced state business and occupation (B&O) tax rate of 0.275% on parts of their income. This rate applies to agents’ commission income only — everything else is taxed at the general service rate of 1.5%. This preferential rate was put into place in 1975 to reflect the fact that much of the travel agents arrange for their clients is interstate travel — something states are not allowed to directly tax under federal law. The final version of the budget, passed by the legislature late last week and signed into law on June 30, 2013, keeps the 0.275% rate intact.