Q: If I operate a host agency in a state with a seller of travel registration law, do our independent contractors (ICs) located outside the state have to qualify for an exemption under that seller of travel law? Does it matter if the IC’s clients are located in our state? What if both the IC and the IC’s clients are located outside the state? What if the IC is located in our state but sells to clients outside the state?
A: These are novel questions, and I am certain that the authors of the seller of travel registration laws did not think about all of them when they wrote the laws a generation ago. Hosts and ICs have proliferated to become the dominant configuration in retail travel sales only in the past decade or so.
So, you cannot find the answers by reading the statutes. You have to interpret them in light of their purpose, which is to protect consumers in the state of registration.
There are only four states with seller of travel registration requirements: California, Florida, Hawaii and Washington. You can still read articles stating that Nevada, Iowa and Rhode Island have such laws, but they were repealed.
Hawaii has no provision for exemption from registration, which leaves California, Florida and Washington. ICs do not have to obtain their own seller of travel licenses there if they qualify for an exemption from registration.
Unfortunately, each of the three states has different criteria for exemption, and it is impossible to include all of them here. You can read them, together with my commentary, at pestronk.com/exemptions.
Scenario 1: If your IC is located outside your state and does not sell to clients in the state, the IC does not have to qualify for an exemption under the law of your state, nor, obviously, does the IC need to be registered as a seller of travel in your state.
Scenario 2: If your IC is located outside your state and sells to clients in the state, the IC has to qualify for an exemption or must register as a seller of travel in your state.
Scenario 3: If your IC is located in your state and sells to clients in the state, the IC has to qualify for an exemption or must register as a seller of travel in your state.
Scenario 4: If your IC is located in your state and sells to clients only outside your state, the IC probably has to qualify for an exemption from registration in your state, or the IC must register as a seller of travel in your state. The answer is even less clear-cut than the others, but I am sure that the enforcement authorities would take that position.
If an IC must qualify but does not meet the criteria for exemption for any reason, the IC must register as a seller of travel if the IC is located in one of the three states or if the IC sells to clients there.
