Seller of Travel Laws Explained
You're finally ready to launch your dream travel agency! You've picked your niche, set up your website, and you're pumped to start booking amazing trips for clients! But wait—have you heard about Seller of Travel laws? If you're scratching your head right now, you're not alone. These regulations trip up so many new (and even experienced) travel professionals!
Here's the thing: ignoring these laws isn't just risky—it can literally shut down your business before it even gets off the ground. We're talking hefty fines, potential criminal charges, and zero ability to legally operate in certain states. Yikes!
But don't panic! Our guide breaks down everything you need to know about Seller of Travel laws in plain English. No confusing legal jargon, no overwhelming details—just the real-world info you actually need to protect your business and serve your clients confidently!
Once you get your license consider joining us here at MainStreet Travel! You can work as much or as little as you want all from the comfort of your own home! Plus, we have a $99 Starter Membership and a $199 Travel Plus Membership that comes with everything you need to get started! No experience necessary!
What Exactly IS a Seller of Travel?
Let's start with the basics. A "Seller of Travel" sounds fancy, but it's really just anyone who sells, arranges, advertises, or provides travel services to customers. Think travel agents, tour operators, travel clubs, and even those vacation certificate companies you see advertised everywhere.
California's definition gets super specific: it's anyone who "sells, provides, furnishes, contracts for, arranges, or advertises that he or she can or may arrange" air or sea transportation, or land transportation when the total charge exceeds $300. Florida casts an even wider net, including "any resident or nonresident person, firm, corporation or business entity" offering prearranged travel services.
The key word here? "Arranges." Even if you're not physically issuing tickets yourself, if you're helping someone plan and book travel for a fee or commission, you might fall under these laws.
Why Do These Laws Even Exist?
Seller of Travel laws aren't just red tape designed to make your life harder. They actually exist to protect consumers from shady operators who take people's money and disappear. Remember those horror stories about travelers losing thousands when their travel company went belly-up? That's exactly what these regulations aim to prevent.
These laws typically require travel sellers to register with the state, maintain trust accounts or bonds to protect consumer funds, and provide clear disclosures about who's providing the travel services. Think of it as a safety net—both for travelers and for legitimate businesses like yours who are doing things right!
The Big Four That Require Registration
Here's where it gets real. Currently, only four states have active Seller of Travel registration requirements:
California – The strictest and most complex of all SOT states
Florida – Heavy emphasis on surety bonds for consumer protection
Hawaii – Unique trust account requirements
Washington – Comprehensive registration with detailed record-keeping
You might be thinking, "But I don't live in any of those states!" Hold up—here's the plot twist that catches everyone off guard.
Location Doesn't Matter!
This is huge, so pay attention! These laws apply to ANY travel business selling to residents of these states, regardless of where your agency is actually located. You could be running your business from a home office in Ohio, but if you're booking Disney vacations for a family in California, you need a California Seller of Travel registration.
It's called "extraterritorial application," and it means the laws reach beyond state borders. The states define "doing business" so broadly that simply having a website viewable by their residents can technically bring you under their jurisdiction. Wild, right?
Breaking Down Each State's Requirements
California: The Most Demanding of the Bunch
We’ll be honest, California doesn't mess around with travel regulations, they want that money! Here's what you're looking at:
Registration Costs:
Travel Consumer Restitution Corporation (TCRC) registration: $100 per location
Annual Seller of Travel registration: $300
California business registration with Secretary of State (required even if you're not based there)
Financial Protection:
You'll need either a trust account at a California bank OR a surety bond. The trust account must be completely separate from your operating account and can only be used to deposit consumer funds and pay suppliers. You can't touch your commissions until AFTER you've paid the travel suppliers!
The Restitution Fund:
If you're California-based and doing business with California residents, you must participate in the TCRC. This is essentially a consumer protection fund that all sellers of travel contribute to, ensuring travelers can get reimbursed if something goes wrong.
Registration Number Display:
Your CA SOT registration number must appear on ALL advertising—and yes, that includes your website, social media posts, and email signatures.
Total Annual Cost: Expect $370-700+ to maintain California compliance.
Florida: Bond Requirements Take Center Stage
Florida takes a different approach, focusing heavily on surety bonds rather than trust accounts.
Registration Costs:
Annual registration fee: $300
Surety bond: $25,000 if you DON'T sell vacation certificates
Surety bond: $50,000 if you DO sell vacation certificates
Additional document submission fee: $100 (if selling vacation certificates)
Special IC Requirements:
Unlike other states, Florida requires independent contractors working under a host agency to file their own annual affidavit and pay a $50 fee. This is on top of the host agency's registration!
Total Annual Cost: Between $620-1,300 depending on your business model.
Hawaii: The Biennial System
Hawaii operates on an odd-year renewal cycle that creates some interesting cost variations.
Registration Costs:
Registration fee: $146 in odd-numbered years
Registration fee: $215 in even-numbered years
Business registration with the Business Registration Division (BREG) required for LLCs, LLPs, corporations, and partnerships
Trust Account Requirements:
Hawaii requires trust accounts and has NO exemptions for independent contractors. Every IC needs their own registration, period.
Total Annual Cost: $196-615 depending on timing and business structure.
Washington: Straightforward but Strict
Washington keeps things relatively simple compared to California.
Registration Costs:
Annual license fee: $272
Possible surety bond or letter of credit requirement
Record-Keeping:
You must maintain required records at your registered location for two years after travel completion. Washington takes documentation seriously—they want everything traceable and transparent.
Total Annual Cost: $322-372.
What Happened to Iowa?
Great question! Here’s the great answer: Iowa used to have Seller of Travel requirements, but they repealed them as of July 1, 2020. Iowa-based agencies still need to register their business with the Secretary of State, but the specific SOT license is gone. One less state to worry about! Sweet!
The Independent Contractor Exemption Game
If you're working as an independent contractor (IC) under a host agency, you might be able to skip getting your own Seller of Travel registration. But—and this is important—the exemption requirements are VERY specific and different in each state.
California IC Exemptions
To qualify for exemption in California, you must meet ALL of these criteria:
Be a sole proprietor, single-member LLC, or single-shareholder S Corp
Have a written contract with a registered seller of travel
Sell through your host's accreditation number
Have clients pay the host or supplier directly (no cash, no checks made out to you)
Disclose your host's name, address, phone number, and CA SOT registration number in every sale
Use your host's name and accreditation in all advertising
Not have your own trust account for client funds
Miss even ONE of these requirements? You'll need your own registration.
Florida IC Exemptions
Florida requires ICs to file an annual affidavit and pay $50 even if exempt. Beyond that, you must:
Have a written contract with a registered seller of travel
Not receive fees, commissions, or consideration directly from clients
Not possess unused ticket stock
Not have the ability to issue tickets, lodging certificates, vacation certificates, or travel documents
Washington IC Exemptions
Washington requires ICs to:
Conduct business in the name of the registered seller of travel
Have a written contract with the host
Explicitly identify the host agency in all sales (like "Jane Smith, Independent Travel Advisor with XYZ Travel")
Hawaii Has NO Exemptions
Let me say this clearly: Hawaii does NOT offer any exemptions for independent contractors. Every IC selling to Hawaii residents needs their own registration. No exceptions, no loopholes, no way around it.
Understanding Trust Accounts and Bonds
One of the most confusing aspects of Seller of Travel compliance is understanding trust accounts and surety bonds. Let's break it down.
What's a Trust Account?
A trust account is a separate bank account where you deposit client money before paying suppliers. It's not YOUR money yet—it's held in trust for your clients until the travel services are delivered.
The Rules:
Must be completely separate from your operating account
Used ONLY to deposit consumer funds and pay suppliers
Cannot be used for business expenses, personal expenses, salaries, or rent
You can withdraw your commission ONLY after paying all supplier invoices
Trust accounts exist to ensure that if your business goes under, client funds are protected and can be refunded. When companies fail to maintain proper trust accounts and use client funds for operating expenses, that's when travelers lose their money.
What's a Surety Bond?
A surety bond is like insurance for your clients. If you fail to provide the travel services you promised or violate any requirements, clients can make a claim against your bond.
Here's how it works:
A client files a valid claim because you didn't deliver what was promised
The surety company investigates the claim
If valid, the surety asks you to fulfill your obligation
If you can't or won't, the surety pays the client
You must repay the surety company every penny they paid out
Bonds aren't a get-out-of-jail-free card—they're a financial guarantee that protects consumers, with you ultimately on the hook.
What You MUST Disclose to Clients
Seller of Travel laws require specific disclosures to customers at the time of sale. This isn't optional—it's the law!
Written disclosure must include:
Your business name, address, and phone number
Total amount to be paid by the customer
Amount already paid
Date of any future payments
Purpose of each payment
Itemized statement of balance due
Your Seller of Travel registration number
Name of the vendor providing the actual travel services (airline, cruise line, tour operator, etc.)
Cancellation penalties and policies
Information about Travel Consumer Restitution Fund coverage (in California)
If payment isn't made in person, you must provide this written statement within three business days of receiving payment.
Registration Number for Advertising
Once you're registered, your Seller of Travel number must appear on ALL advertising. And when they say "all," they mean ALL:
Your website (every page, or at minimum the footer)
Social media posts promoting travel services
Email marketing campaigns
Print brochures and flyers
Business cards
Any other promotional materials
Failing to display your registration number is a violation that can result in penalties. Make it prominent, make it visible, and make it consistent!
The Refund Rules You Need to Know
Seller of Travel laws spell out exactly when and how you must provide refunds to clients.
You must refund all money for services not provided within:
30 days from the scheduled departure date, OR
30 days from when the passenger learned services wouldn't be provided, OR
The date the supplier cancels or breaches the contract
Whichever date comes first is your deadline.
If you've already disbursed passenger funds to suppliers according to the law's requirements, you may provide written proof of that disbursement instead of a refund. But you need bank records and proof of the supplier's current registration if you forwarded funds to another seller of travel.
Important note: If you don't provide cancellation policies in writing before taking payment, you CANNOT later impose cancellation penalties on clients. The law protects consumers from surprise fees!
The Consequences of Non-Compliance
Ignoring Seller of Travel requirements isn't just a paperwork headache, it can destroy your business and even land you in jail.
Civil Penalties
Costly fines that accumulate daily
Consumer restitution requirements
Cease and desist orders preventing future travel sales
Loss of the right to enforce travel contracts against consumers
Liability for consumer damages, including those normally attributed to supplier defaults
Criminal Penalties (California)
California doesn't play around. Violations can be prosecuted as:
Misdemeanor: Up to $10,000 fine, one year in county jail, or both
Felony: When amounts exceed $2,350 aggregate or $950 per passenger in 12 months, penalties jump to 16 months to 3 years in prison, up to $25,000 fine, or both
Using a false registration number: Misdemeanor or felony charges with intent to defraud
Real-World Example
In 2024, a California travel agent was sentenced to six months of home confinement and six months of felony probation for embezzling travel funds, specifically, failing to refund $260,000 to parents after COVID-19 cancelled middle school trips. That's a real person who lost their freedom and owes a quarter million dollars!
Who Does NOT Need Seller of Travel Registration?
Not everyone in the travel ecosystem needs SOT registration. The laws specifically exclude:
Airlines and air carriers
Ocean carriers and cruise lines
Hotels selling only their own accommodations
Common carriers transporting people or property
Certain certified insurance entities
Officially appointed airline agents (under specific circumstances)
But here's the catch: if you're a travel agent SELLING services from these exempt entities, you're NOT exempt. You still need to register!
How Seller of Travel Relates to Other Accreditations
Many new agents get confused about how SOT registration relates to other industry credentials like ARC, IATAN, CLIA, and TRUE.
ARC and IATAN
Both ARC (Airlines Reporting Corporation) and IATAN (International Airlines Travel Agent Network) require proof of Seller of Travel registration for the Big Four states when you apply for accreditation. You can't get these airline ticketing credentials without showing SOT compliance first.
Host Agency Coverage
If you work with a host agency, they typically handle Seller of Travel registrations and compliance under their umbrella. This is one of the BIGGEST benefits of joining a host, they take on the legal burden, the costs, and the administrative headaches of SOT compliance.
The host provides you with their registration numbers to use, and as long as you meet the exemption criteria, you don't need your own separate registration. But—and this is critical, you must follow their policies exactly, or you could void that coverage!
Special Considerations for Disney Travel Agents
Planning to specialize in Disney vacations? Here's what you need to know about SOT requirements.
Disney doesn't require any special seller of travel credentials beyond what the states require. Whether you're booking Walt Disney World, Disneyland, Disney Cruise Line, Aulani, or Adventures by Disney, the same SOT rules apply.
Good news: You don't need to be an "EarMarked" or Authorized Disney Vacation Planner agency to sell Disney vacations. Those designations are nice-to-have recognition for agencies that specialize exclusively in Disney, but they're not legally required.
If you're working with a host agency that has proper SOT registrations, you can book Disney trips under their credentials while meeting exemption requirements. Most Disney-focused travel agents start this way before eventually getting their own registrations if they build a large enough business.
Online Travel Agencies and Seller of Travel
Think Seller of Travel only applies to traditional brick-and-mortar agencies? Think again!
Online Travel Agencies (OTAs) that sell travel services to residents of the Big Four states must also comply with SOT requirements. It doesn't matter if your entire business operates through a website—if you're arranging, selling, or providing travel services for a commission or fee, you're a seller of travel.
This applies whether you're running a full-scale OTA like Expedia or a small niche booking site specializing in adventure travel. The law looks at what you're DOING, not where you're doing it from.
Vacation Certificates
Selling vacation certificates or running a travel club? Buckle up, you've got additional hurdles!
What's a vacation certificate?
It's an arrangement where customers pay in advance for travel accommodations to be used later, without specific dates designated at the time of purchase.
Extra requirements include:
Higher surety bond amounts (up to $50,000 in Florida)
Additional document submission fees
Stricter disclosure requirements about terms and conditions
Clear explanation of ALL eligibility requirements
States scrutinize vacation certificate sellers heavily because they're more prone to consumer complaints. Many of those "free vacation" offers you see? They fall under vacation certificate regulations and carry serious compliance requirements.
Common Travel Avisor Mistakes
After researching dozens of cases and talking to legal experts, here are the mistakes that repeatedly trip up travel professionals:
Mistake #1: The "I'm Too Small" Fallacy
Many home-based agents think SOT laws don't apply to them because they only book a few trips per year. WRONG! The laws don't have volume minimums. If you're selling travel to residents of these states, you need to comply—period.
Mistake #2: Mixing Business and Personal Finances
Depositing commission checks into your personal bank account? Using client payments to cover operating expenses? These are HUGE red flags that violate trust account requirements. Set up separate business accounts from day one!
Mistake #3: Not Reading the Host Agency Contract
If you're claiming exemption under your host's SOT registration, you MUST follow their contract requirements exactly. Taking payments directly from clients when your contract prohibits it? You've just voided your exemption and are now operating illegally.
Mistake #4: Forgetting Registration Numbers in Marketing
Creating beautiful Instagram posts to promote your travel services, but forgetting to include your SOT registration number? That's a violation. Make it a habit to include your registration info in every piece of marketing you create.
Mistake #5: Assuming Your Host Has You Covered for Everything
Host agencies typically cover SOT registrations, but you need to verify which states they're registered in and confirm you meet ALL exemption criteria. Don't assume—ask for written confirmation and keep it in your files!
Mistake #6: Not Keeping Proper Records
Washington requires you to keep records for two years after travel completion. California and Florida have similar requirements. Deleted that client file right after their trip? You might be in violation if a complaint comes up later!
Mistake #7: Taking Deposits Without Proper Disclosure
You must provide written disclosure including your SOT number, cancellation policies, and other required information at or before taking payment. Collecting deposits without this documentation leaves you vulnerable to penalties.
How to Check if Someone Has a Valid Registration
Want to verify a travel agency's registration before partnering with them or referring clients? Here's how:
California: Contact the Attorney General's Seller of Travel Program at (213) 269-6564 or sellers.travel@doj.ca.gov. Ask to verify the registration number and check expiration dates.
Florida: Use the Florida Department of Agriculture and Consumer Services online database at https://csapp.fdacs.gov/csrep/
Washington: Contact the Department of Licensing to verify active registrations
Hawaii: Reach out to the Department of Commerce and Consumer Affairs
Always verify that registrations are current and haven't expired. An expired registration means the seller is operating illegally!
Easy Steps to Get Your Own Registration
Thinking you need your own Seller of Travel registration? Here's the process:
For California:
Register your business with the California Secretary of State (even if out-of-state)
Obtain a California business ID
Register with the Travel Consumer Restitution Corporation ($100)
Set up a trust account at a California bank OR obtain a surety bond
Apply for your CA Seller of Travel number through the Attorney General's office ($300)
Display your registration number on all advertising
Renew annually
For Florida:
Register your business entity in Florida
Obtain a surety bond ($25,000-$50,000 depending on whether you sell vacation certificates)
Complete the registration form
Submit application with $300 fee (plus $100 if selling vacation certificates)
Renew annually
For Hawaii:
Register business with Business Registration Division if you're an LLC, LLP, corporation, or partnership
Set up trust account
Complete the Hawaii travel agent license application with trust account information
Submit fees: $146-$215 depending on year
Renew every odd-numbered year
For Washington:
Register your business (can be out-of-state registration)
Determine if you need a surety bond or letter of credit
Submit application online with required documentation
Pay $272 annual fee
Renew annually
Total first-year costs for all four states: Expect $2,000-$5,000, settling into $1,500-$3,000 annually for ongoing compliance.
The Benefits of Compliance
Yes, following SOT laws keeps you out of legal hot water. But there are real business benefits too:
Client Trust: Displaying your registration number shows professionalism and builds confidence. Clients researching travel agents often check for proper licensing.
Supplier Relationships: Many preferred supplier programs and consortia require proof of SOT compliance. Want those better commission rates? Get registered!
Marketing Advantage: You can legitimately advertise in those states without fear. Competitors cutting corners? They're one complaint away from shutdown.
Peace of Mind: Sleep better knowing you're running a legitimate, protected business. When a client dispute arises, your proper registration and documentation will be your best defense.
Business Growth: Proper compliance creates the foundation for scaling your business. Banks, investors, and partners want to see legal operations before they'll work with you.
Staying Current
Seller of Travel regulations aren't static. States update requirements, fee schedules, and processes regularly.
Best practices for staying current:
Subscribe to updates from each state's regulatory agency
Join professional associations like ASTA (American Society of Travel Advisors) that monitor regulatory changes
Work with a travel industry attorney for major business decisions
Attend industry conferences where legal updates are discussed
Follow trade publications like Travel Weekly and Travel Market Report
Connect with other agents in your host agency or professional network who share updates
For example, Iowa repealed its SOT requirements in 2020. Washington has modified its reporting requirements over the years. California continues to update its TCRC participation rules. Staying informed prevents expensive surprises!
Frequently Asked Questions
Do I need a Seller of Travel license if I only book Disney vacations?
Yes, if you're selling to residents of California, Florida, Hawaii, or Washington. The type of travel you book doesn't matter—the destination of your clients and where they live is what triggers the requirement.
Can I operate my travel business from home and still need SOT registration?
Absolutely! Home-based travel agents are subject to the same Seller of Travel laws as storefront agencies. Your business location doesn't exempt you from compliance.
What's the difference between a Seller of Travel license and a business license?
They're completely different! A local business license allows you to operate a business in your city or county. A Seller of Travel registration is a state-level consumer protection requirement specifically for those selling travel services. You might need both!
If I'm registered in one state, does that cover all four states?
No! Each state requires its own separate registration. California registration doesn't cover you for Florida sales, and vice versa. If you sell to residents of multiple SOT states, you need multiple registrations.
How long does it take to get registered?
It varies by state. California can take several weeks because of the TCRC registration requirement. Florida typically processes in 2-4 weeks. Hawaii processes in 3-6 weeks. Washington is usually faster at 1-2 weeks. Plan ahead—don't wait until you need it!
Do I need SOT registration if I only book flights through airline websites?
It depends. If you're simply directing clients to book on their own and not receiving compensation, probably not. But if you're arranging the booking, receiving commission or fees, and acting as an intermediary, yes—you're a seller of travel.
What happens if my host agency loses their Seller of Travel registration?
Big problem! If your host's registration lapses or gets revoked, you're no longer covered under their exemption. You'd need to immediately stop selling to residents of that state or get your own emergency registration. This is why vetting your host agency's compliance is critical!
Can I get a Seller of Travel license before I have any clients?
Yes, and that's actually the smart move! Get your registrations in place BEFORE you start actively marketing. This allows you to legally advertise, display your registration numbers, and operate from day one.
Are there any states considering new Seller of Travel laws?
States periodically propose new travel seller regulations, though none have passed recently. Industry associations monitor these legislative efforts. The trend has actually been toward simplification (like Iowa's repeal) rather than expansion.
What if I accidentally took a booking from a California resident before getting registered?
Stop immediately! Do not take payment or proceed with the booking. Explain to the client that you're finalizing your registration and will reach out when you can legally serve California residents. Operating without registration, even once, can trigger penalties.
How do Seller of Travel laws apply to travel influencers?
If you're earning commission or fees by arranging travel services (not just promoting them), you're likely a seller of travel. Posting affiliate links might not trigger requirements, but actually booking trips for followers in exchange for payment? That requires registration.
Can I list "travel agent" as my profession if I'm not SOT registered?
This gets murky. While you might call yourself a travel advisor or enthusiast, actively selling travel services without proper registration violates state law. The title matters less than the actual activities you're performing.
What's the penalty for letting my registration expire?
Operating with an expired registration is the same as never having one. You're no longer legally authorized to sell travel in that state. Penalties can include fines, consumer restitution requirements, and potential criminal charges for continued operation.
Do travel advisors who only plan trips but don't handle money need registration?
Generally no, but be careful! If you're only providing consulting services for a flat fee without booking or handling payments, you might not meet the "seller of travel" definition. However, if you're earning commissions from suppliers, you're probably included. Consult a travel attorney for your specific situation.
How do I prove my host agency's Seller of Travel registration to suppliers?
Ask your host agency for copies of their registration certificates for each state. Keep these in your files. When suppliers request proof, provide copies showing your host's registration numbers and your affiliation with them.
Your Action Plan
Feeling overwhelmed? Break it down into manageable steps:
If you're starting a travel business:
Research host agencies that handle SOT compliance for their ICs
Verify which states they're registered in before signing
Understand the exemption requirements and commit to following them exactly
Get written confirmation of your coverage under their registration
Keep copies of all registration certificates in your business files
If you're already operating but haven't addressed SOT:
Immediately assess which states your clients live in
Stop marketing to residents of SOT states until you're compliant
Contact your host agency (if you have one) about registration coverage
If going independent, start the registration process immediately in applicable states
Add registration numbers to all existing marketing materials
If you want to get your own registrations:
Budget $2,000-$5,000 for first-year setup costs across all four states
Start with the state where most of your clients live
Work with a travel industry attorney to ensure proper setup
Consider hiring a licensing service to handle the paperwork
Mark renewal dates on your calendar and set up reminders
Compliance is Your Business Foundation
Look, nobody gets into the travel industry because they're excited about legal compliance and paperwork. We do this because we love helping people create incredible memories, explore new destinations, and experience the world!
But here's the reality: Seller of Travel laws aren't optional suggestions. They're legal requirements designed to protect both travelers and legitimate businesses. Ignoring them puts everything you've worked for at risk—your business, your income, your reputation, and potentially your freedom.
The good news? Once you understand these requirements and get proper registrations in place, you can focus on what you do best: creating amazing travel experiences. You'll sleep better knowing your business is built on a solid legal foundation. You'll build stronger client relationships because you're operating transparently. And you'll stand out from competitors who are cutting corners and hoping they don't get caught!
Whether you're just starting out or you've been in the industry for years, take the time to get your Seller of Travel compliance right. Talk to your host agency, consult with a travel attorney if needed, and invest in proper registration. Your future self (and your future clients) will thank you!
Now get out there and start booking those dream vacations—legally, confidently, and successfully! The world is waiting, and you've got travelers to help explore it. Just make sure your registrations are in order first!
