Exemptions

EXEMPTIONS FOR ICs FROM HAVING TO REGISTER AS SELLERS OF TRAVEL

California, Florida, and Washington State have provisions in their Seller of Travel laws that exempt independent contractors of registered sellers from having to register, if and only if the independent contractors meet certain criteria. The criteria are as follows, with Mark’s commentary in brackets in bold.

California

Business and Professions Code 17.550.20(g)

(g) This section does not apply to 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 all of the following: [So, an IC can be exempt from registration only if it is a sole proprietor, LLCs owned by an individual, or S corporation owned by an individual. It must also meet all six of the following criteria.]

(1) Has a written contract [So, there must be a written contract.] with a registered seller of travel to act on that registered seller of travel’s behalf in offering or selling air or sea transportation and other travel goods or services in connection with the transportation. [The IC must “act on the registered seller’s behalf”, but the meaning of the quoted phrase is very unclear.]

(2) Acts only on behalf of a registered seller of travel with whom the person has a written contract in the offer or sale to a passenger of air or sea transportation and other goods or services in connection with the transportation and sells no other air or sea transportation or travel services to that passenger. [So, the IC must act only for the registered seller (i.e., the host), or another registered seller. The IC cannot sell other travel.]

(3) Provides air or sea transportation or travel services that are offered or sold pursuant to the official agency appointment of the registered seller of travel with whom the person has a written contract. [The IC must offer services “pursuant to the official agency appointment”, which presumably means that the IC must make sales using the host’s ARC, IATA, or CLIA number, not the IC’s own number.]

(4) Does not receive any consideration for air or sea transportation or other travel services from the passenger. [The IC cannot be paid a fee by the client. Presumably, however, the IC can charge a host’s fee set by the IC, and the latter can collect it remit it to the IC.]

(5) Requires the passenger to pay all consideration for air or sea transportation or other travel services directly to the air carrier or ocean carrier or to the registered seller of travel. [The client’s payment must go directly to the supplier or the host. The IC cannot deposit it.]

(6) Discloses both of the following:

(A) The person is acting on behalf of a registered seller of travel. [So, in the sale, the IC must disclose the host’s name, although the IC can also use its own name.]

(B) The name, address, telephone number, and registration number of the registered seller of travel on whose behalf the person is acting.

The person shall make the disclosures required by this paragraph in writing to the passenger at the same time the passenger receives notice under Section 17550.13. [This refers to the receipt for the first payment.] If the person transacts business in this state on the Internet, the disclosures also shall appear on the home page of the person’s Internet Web site [This is another disclosure requirement.] and shall be prominently set forth in the first electronic mail message [This is yet another disclosure requirement.] sent to the passenger that refers to the passenger’s purchase of air or sea transportation or travel services.

Florida

FL Statutes 559.928

(3) Each independent agent shall annually file an affidavit [However, see the next paragraph, where it is called an “application”.] with the department prior to engaging in business in this state. This affidavit must include the independent agent’s full name, legal business or trade name, mailing address, business address, telephone number, social security number, and the name or names and addresses of each seller of travel represented by the independent agent. A letter evidencing proof of filing must be issued by the department and must be prominently displayed in the independent agent’s primary place of business. As used in this subsection, the term “independent agent” means a person who represents a seller of travel by soliciting persons on its behalf [So, to be exempt, the IC must solicit persons “on behalf of” the host. I take that to mean that the IC must identify the host in the sale by using a title such as “an independent travel advisor of Host Travel.”]; who has a written contract [So, a written contract is the first requirement.] with a seller of travel which is operating in compliance with this part and any rules adopted thereunder [The host must be with a registered seller of travel]; who does not receive a fee, commission, or other valuable consideration directly from the purchaser for the seller of travel [The IC cannot charge a fee directly, but the IC can charge a host’s fee set by the IC, and the latter can collect it remit it to the IC.]; who does not at any time have any unissued ticket stock [There is no such thing as unissued ticket stock anymore, so this is moot.] or travel documents in his or her possession [The word “unissued also applies to “travel documents”, but again, this is moot.]; and who does not have the ability to issue tickets, vacation certificates, or any other travel document [In other words, the IC cannot cause the host to issue tickets, and all tickets and travel documents must come through the host.]. The term “independent agent” does not include an affiliate of the seller of travel, as that term is used in s. 559.935(3), or the employees of the seller of travel or of such affiliates.

FL Admin Code 5J-9.002

(3) An independent agent claiming an exemption from registration shall file with the department FDACS-10211, Sellers of Travel Independent Sales Agents Application, Rev. 02/17, hereby incorporated by reference. Copies of this form may be obtained from the Department of Agriculture and Consumer Services, Division of Consumer Services, Attention: Sellers of Travel, 2005 Apalachee Parkway, Tallahassee, Florida 32399-6500, or accessed online at: http://www.flrules.org/Gateway/reference.asp?No=Ref-08465.

Washington State

RCW 19.138.100

(5) If a seller of travel is employed by or under contract [So, the IC must have a contract with the registered host.] 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:

(a) 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 [So, the IC must conduct business “in the name of” the registered host. I take that to mean that the IC must identify the host in the sale by using a title such as “an independent travel advisor of Host Travel”]; and

(b) 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. [In other words, the IC can collect money but only if it is payable to, and deposited by, the registered host (or, presumably, the supplier).]