by Robin Amster
Last updated: 5:20 PM ET, Wed December 6, 2017
ASTA has a few words for Congress.
The society of travel agents has written to Congressional conferees to express its concerns with the proposed tax bill which is now before a conference committee charged with ironing out differences between the Senate and House version of the Tax Cuts and Jobs Act (S. 1/H.R. 1).
In its letter, ASTA's Executive Vice President, Advocacy, Eben Peck said the association requests that in the final bill, "pass-through" businesses be taxed at the lowest rate and receive the broadest access to various deductions on as permanent a basis as possible.
Peck said the vast majority of ASTA's more than 3,000 U.S. travel agency members are "pass-through" entities, which include proprietorships, partnerships and "S corporations."
A "C corporation," under U.S. federal income tax law, refers to any corporation that is taxed separately from its owners. C corporations are distinguished from "S corporations," which generally are not taxed separately.
"Our general position is that pass-through businesses should be afforded the most favorable tax treatment possible in the final bill," the letter said.
"At the same time, we wish to associate ourselves in particular with the sentiments of the S-Corporation Association of America and other small business advocates that conferees should devote a proportional amount of revenue to reducing the pass-through rate as it does to reducing the C-corporation rate," the letter added.
"ASTA also believes that owners of pass-through businesses should be able to deduct state and local income taxes paid on their pass-through business income, and that the pass-through business deduction should be made permanent, just as the reduction in the C-corporation rate to 20 percent is made permanent."
The association has other concerns with the tax bill: Travel agencies rely heavily on the services of independent contractors (ICs) whose numbers are growing, the letter noted.
According to its latest member surveys, 75 percent of ASTA member agencies reported using at least one IC. Of those who use ICs, the average agency used 12 ICs against 13 full-time employees.
The letter said the Senate Finance Committee's consideration of proposed amendments to its bill would change the tax treatment of ICs and agencies who employ them, both of which ASTA opposes.
"ICs and their clients currently face substantial uncertainty over whether their business relationship will be respected for purposes of federal statutes, due to the variety of statutory definitions for the term 'employee,'" the letter said.
[READ MORE]READ MORE: ASTA Reveals Its Plans for Washington[/READ MORE]
Instead of making a complicated situation even more complex or removing longstanding protections for businesses who hire ICs, ASTA suggested the final tax bill incorporate a House bill, the Harmonization of Coverage Act of 2017, introduced in September, that would harmonize the definition of the term "employee" for the purposes of federal employment statutes.
It also requested that the final bill not require tax withholding on payments to ICs.
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