Members of the American Society of Travel Agents (ASTA) rallied Wednesday in Maryland against state legislation that would apply a six percent sales tax to the service fees or markups charged by “accommodations intermediaries” when booking Maryland hotel rooms.
ASTA members joined Maryland General Assembly members and the Travel Technology Association in a press conference in Annapolis to fight against Senate Bill 190, now pending before the Maryland House of Delegates. Recognizing that defeating this legislation is important for all travel agencies, not just those in the state, ASTA Treasurer Jay Ellenby, president and CEO of Safe Harbors Travel Group in Bel Air, Md., said, “Let’s be clear. Travel agents pay their fair share in taxes. This proposed fee would tax income already subject to federal and state income taxes, resulting in triple taxation that would have to be passed on to the consumer.”
Ellenby has been a key spokesman for ASTA, explaining why SB190 is anti-consumer. He testified in February before the Senate Budget and Taxation Committee and again in March before the House Ways and Means Committee, saying: “If the General Assembly wants to see Maryland grow as a destination for both leisure and business travel, as I know it does, then I don’t think it makes sense to burden travel agencies who use this fee-for-service business model with new taxes and red tape.”
Also speaking Wednesday to the media, Travel-On CEO Karen Dunlap, an ASTA member based in Beltsville, Md., explained the importance of the independent travel distribution system to the economy. “This is a system that’s critical to the health of the broader travel and tourism industry, but especially to the hotel chains. In 2013, about a quarter of all hotel bookings, $33 billion worth of business, came through the travel agency channel,” Dunlap said.
ASTA will continue to fight this and any similar moves by legislatures operating under the premise that travel agencies of all shapes and sizes should be taxed to fill state coffers. “Contrary to the misplaced notion that this will not impact brick-and-mortar agencies, traditional travel agencies do the things the big OTAs do,” said Eben Peck, ASTA SVP of Government and Industry Affairs. “Agencies have adapted to the Internet era and part of that evolution has been to shift their business model from one being based on commissions to one based on fees.”
