Do You Need a Travel Agent License?
There's a lot of things to think about when you're starting up your travel agency—a name, a niche, how to find clients. One day, it dawns on you, Do you need a travel agent license? Is there even such a thing as a travel agent license? How do you get one? So you turned to Google and here you are—welcome! Depending on what state you live in (or if you want to sell to residents of states with seller of travel requirements) answer is yes, you may be needing one.
One day, it dawns on you, Do you need a travel agent license? Is there even such a thing as a travel agent license? How do you get one? So you turned to Google and here you are—welcome! Depending on what state you live in (or if you want to sell to residents of states with seller of travel requirements) answer is yes, you may be needing one.
If you're here looking for the regulations for Canadian travel agencies (and for travel agencies selling to Canadians), we've updated that info and gave it some of its own real estate in this article up yonder.
A Travel Agent License in the United States
When we're discussing an agent in the United States and talking about a travel agent license, what we're referring to is really just the government red tape (ahem, and fees) of registering your travel agency. It has nothing to do with training or testing of your travel agent knowledge. You fill out some forms, pay a fee, and get a seller of travel number.
On the national level, you don't have to worry. The US government isn't looking to cash in on travel agencies through registration/licensing fees. Whew!
The travel agent license thing changes a bit when it comes to the state level. Drat.
In the US, there are 5 states that have Seller of Travel Laws, i.e. a travel agent license. Before I tell you more, be warned you're going to feel overwhelmed by all the fancy red tape and bureaucratic hoops to jump through—don't worry, it's natural! As with anything, there's a general miserableness that accompanies government paperwork and legalese. Remember, it's temporary.
We broke it down by state to make it feel less like a circus.
So here we go, the states that have seller of travel laws:
- California Seller of Travel
- Florida Seller of Travel
- Iowa Seller of Travel
- Washington Seller of Travel
- Hawaii Seller of Travel
If you're located in any of the states above OR if you are planning to sell to residents of those states, you should look into their requirements. Here's a great explanation from Daniel Zim, travel attorney1:
"The SOT for California, Florida, Hawaii, Iowa and Washington apply to any agency that does business with residents of those states. They are extraterritorial laws meaning that the law extends far beyond the borders of the state. The business does not have to reside in the regulating state, the business could reside anywhere in the world but it would have to comply with California, Florida, Hawaii, Iowa and Washington." - Daniel Zim, Travel Attorney
New agencies in Delaware (scroll to No. 24), you are required to register for an occupational license. The cost is currently $25 USD. It's a bit different than the state travel licensing laws above because you only need it if you open a travel agency in Delaware (vs. needing it if you plan to sell to any Delaware residents). Louisiana is also occasionally mentioned by industry attorneys, but I couldn't find travel agencies listed under Louisiana's Professional and Occupational Licenses list. Travel industry attorneys always refer to the 5 bulleted states above as Seller of Travel states but rarely mention Delaware or Louisiana. You'll have to interpret that how you want.
Editor's note 9/10/2015: Nevada did have a seller of travel law... then they kept suspending it for what felt like forever (ahem, 6 years). And in July 2015, travel lawyer Daniel Zim let us know Nevada's Seller of Travel Law is officially repealed and Nevada travel agents do not need a license to sell travel.
Notes on the California Seller of Travel
California Seller of Travel law is the strictest and most complex (and confusing). To make matters even a little more complicated, they updated their Seller of Travel laws as of Jan. 2017. The changes seem to have two major impacts:
1. California amped up enforcement on business regulations. Yup, they did. What does this mean for Sellers of Travel? This means that not only do SOTs need to comply with SOT CA travel regulation, but also need to comply with CA business regulations as well. What this means is that you need to register for a CA state business ID. If you don't live in CA, you should be able to register as an alien.
The other thing in tangent with this is that SOTs also have the joyful obligation to file with Consumer Protection Law of California. Here's form you can fill our for Sole Proprietors and LLCs, partnerships and Trust—or for Corporations.
Are you crying in your beer? Well I have good news too! Drumroll please . . .
2. CA expanded their SOT exemptions have expanded to include more business models!!! These new regulations favor small businesses. Here's how the head honchos say it, the new regulations "would exempt from those provisions a person who is an individual, a single-member limited liability company whose sole member is an individual, or a single-shareholder “S” corporation whose sole shareholder is an individual that meets specified conditions." That's right . . . Emphasis on individual and single.
Curious about those exemptions? Here's they are, below! Ta Daaa!
- Your business model is included among those listed above: Sole Proprietor, single-member LLC, and single-shareholder S Corp.
- You have a signed contract with a host agency (that has a CA SOT).
- You are selling through your host, with your host's accreditation number.
- You use your host's suppliers (no going rogue with your own small boutique suppliers).
- Service Fees must be processed through the host agency. Bummer.
- Client's must pay host or supplier directly. Not you.
- You must disclose your host agency in this situation, including the host's name, address, phone number and registration number.
It's confusing. Don't be afraid to contact their office for clarification.
- Email: [email protected]
- Phone: (213) 897-8065
If your principal place of business is in California, you will need to participate in the Travel Consumer Restitution Fund (TCRF). If your principal place of business is outside of California, you're off the hook when it comes to the TCRF, unless you're a nationally traded company.
Notes on the Florida Seller of Travel
Okay, there's a trend. But just because we like to geek out on this, here's a few exemptions for FLA SOT if you're with a host:
- Act for or on behalf of a seller of travel that is operating in compliance with Sections 559.926-559.939, Florida Statutes, the Sellers of Travel Act; AND
- Have a written contract with the seller(s) of travel listed above (please provide us a copy of the contract); AND
- Do not receive a fee, commission or other valuable consideration directly from the purchasers of travel or travel related services; AND
- Do not at any time have any un-issued ticket stock in my possession; AND
- Do not have the ability to issue tickets, lodging or vacation certificates, or any other travel documents.
Notes on the Hawaii Seller of Travel
One of our awesome Hawaii-based readers gave us the scoop on Hawaii's seller of travel—thanks for your sleuthing, Mara Kunkel! In addition to registering for a seller of travel license, Hawaii has regulations about opening a client trust account. But thanks to Mara's sleuthing at the DCCA, we've learned that Hawaii agents who want to go with a mainland host can apply for a waiver since the agent is not handling clients' money directly.
Hawaii agents with mainland hosts can qualify for a trust account waiver only if they do not handle client monies. Similar to CA, all client money needs to go through the supplier or the host agency. If this is up your alley, you can include that information in a letter and asking for a trust account waiver along with your application for Hawaii's SOT.
Notes on the Washington Seller of Travel
Here's a some info on what may exempt you from a Washington SOT. Here's how it is directly from the site (it will probably sound familiar). If a seller of travel is employed by or under contract as an independent contractor or an outside agent of a seller of travel who is registered under this chapter, the employee, independent contractor, or outside agent need not also be registered if:
- The employee, independent contractor, or outside agent is conducting business as a seller of travel in the name of and under the registration of the registered seller of travel; and
- All money received for travel services by the employee, independent contractor, or outside agent is collected in the name of the registered seller of travel and processed by the registered seller of travel as required under this chapter.
We Made a Pretty Pretty Picture About SOT.
Because that's what we do:
Are you Exempt from Seller of Travel Laws?
Just when you think you understand, you discover maybe you are exempt from seller of travel laws through your host agency! Lucky for us, travel attorney Mark Pestronk wrote a fabulous article (in English that you can understand) that clarifies when independent contractors with a host agency are exempt from seller of travel laws. It's a gem of an article!
Breaking down regulations to the city level is complex. The local level is going to involve some research on your end. What you'll want to do is familiarize yourself with local laws that affect travel agencies. While you're at it, see if there are any general business regulations you should be aware of.
If you don't know where to start to find out more about local laws, contact your Chamber of Commerce or visit our resources page to find your local SBA or SCORE office.
Did We Mention Travel Insurance Licensing... and Waivers?
Yeah. We have more info and regulations for you. Boring, confusing, and frustrating... but very important. Find out more on travel insurance licensing for travel agencies.
Most travel agencies have a travel waiver for their clients. See what other agencies are including in their travel waivers and download a free sample travel waivers and an Oversea Travel Tips & Checklist.
Save Some Money on a Travel Agent License with a Host Agency
Since my site focuses on host agencies, it's important to mention another host agency benefit—saving you money on your travel agency license. In some states, you can use your host's Seller of Travel number instead of purchasing your own!
For instance, in Florida, independent contractors that are exempt don't have to pay the full $300 annual registration fee for a Florida Seller of Travel number. Agents with a host can go under their host's number and pay only $50/yr - a savings of $250. 😊
Check with your host agency or the state's seller of travel office for details. If you're interested in finding a host agency, visit our host agency list and reviews.
It's hard to find info on a travel agent license. Try googling 'Iowa Seller of Travel'. Trust me, it's not easy to find the right page! I wrote this article to save agents time and money. If it helped you out, please give this article a like, tweet, or +1 at the top of the article—doing so makes it easier for others to find this page.
Photo Credits: Brandi Carolyn
- Sorry, we need an obligatory disclaimer. I am not an attorney (but here are some travel attorneys!). I aggregated this info from first-hand experience and other industry sources to create a resource for those looking into a travel agent license. All info is accurate to my knowledge but information given should be fact-checked and never be considered legal advice. ↩