Do any states require licensing for their travel agents? If so, which states and what are the specific requirements? These are common questions within the travel-selling industry, especially for new agents. If you are operating or selling within one of the four seller of travel (SOT) states (Florida, Hawaii, California, and Washington), you do have licensure regulations to abide by. For SOTs in Washington, that means following the guidelines and statutory requirements included in this article.
Seller of Travel and Business Licenses
As a seller of travel, you will be operating a bonafide, and hopefully thriving, business. As a Washington SOT, this means you must complete a business registration with the state. (Alternatively, you can also provide proof of your business registration in another state if your agency operates outside of Washington.) The SOT license and business license are two different entities, but both are required if you want to operate a travel-selling business in Washington.
An SOT license is required if you have a business located in Washington or if you sell to clients located in the state. As with most things, there are exceptions to this rule. These exceptions include the following:
- You have a host agency with a Washington SOT registration number, and you are registered under the host’s number
- You only conduct business under the host agency’s name and not your own
- You do not collect or process money from any clients
While it is certainly possible to meet these requirements and avoid the process of applying for licensure in Washington, in many cases, hosted agents may still be required to obtain their own SOT registration number. If this is the case for you, being informed and prepared for the process is half the battle.
Maybe we should back up a little bit to discuss the purpose of Washington’s seller of travel requirements. Because the tourism industry substantially affects Washington’s state and local economies, the legislature decided to impart regulations and standards on travel agents and agencies. This is also, in part, due to legislative findings and reports that state there were travel agencies that created financial difficulties due to unfair business practices. (A few bad apples, am I right?) So now, most travel agents in Washington must register with the state’s Business Licensing Service.
SOT Registration Process
Licensure presents some obstacles, but don’t be deterred by the extra steps. With a little research and planning, you’ll be leaping over the bureaucratic hurdles in no time. You will need to complete the below steps in order to obtain your Washington seller of travel license.
Complete the Application and Addendum
The Washington Business License Application and Sellers of Travel Registration Addendum must be completed fully and accurately.
Prove Your Financial Responsibility
A surety bond may be required in order to show your financial responsibility. There may be other options available to satisfy this requirement, but surety bonds are a common choice.
Pay the Fees
A $19 business license application filing fee (or $90 if you’re opening the first location of your business) and a $202 SOT registration fee are required.
All necessary fees must be paid at the same time that you file your business license application and SOT registration addendum. The average time to process the application is estimated at two weeks; however, some submissions take up to four weeks to fully process. If you haven’t heard anything regarding the approval or denial of your application after a few weeks, you can reach out to the Washington State Department of Revenue or the Department of Licensing to inquire about the status.
Other Things to Consider
We know there are many things to pay attention to and a long list of to-dos when gearing up to sell travel in Washington. At the risk of overwhelming new SOTs or those new to selling in Washington, here are a few more aspects that you should be aware of. For sellers of travel who hold or will hold payments for over five days, you will need to do one of the following things as part of your licensure process:
- Open an SOT trust account
A seller of travel trust account is a specific type of business account that is meant to hold client funds and payments. It is separate from an operating account and can only be used for very specific purposes, such as paying for travel service providers and issuing commissions. An operating account and a trust account cannot be combined.
- Purchase a bond
Washington sellers of travel may be required to have a surety bond, which is often based on the previous year’s sales. The company that issues the surety bond must be authorized to transact business in Washington. Surety bonds are intended to protect consumers from financial loss caused by statutory violations.
- Become a member of a professional association
If you join a professional association that is approved by the Department of Licensing and maintain a membership of good standing, you may receive an errors and omissions policy and a surety bond. You will need to attach an official certification from the association to your SOT addendum and submit it with your other application documents.
Each of these options is intended to provide assurance that client payments will be handled appropriately. The seller of travel addendum you submit with your business application will ask you to note which method you choose, and you may also be required to provide proof of your chosen option.
Travel Industry Solutions(TIS) is a leader in travel agent resources and the only provider of warrantied legal contracts for travel-selling professionals. We have cultivated a thriving community of travel agents, and we intend to continue empowering both new and experienced sellers. If you’re looking for a place where your success is celebrated and your growth is nurtured, a membership with TIS could be the perfect place for you. Visit our website to read about all the perks of being a member.