Travel Agencies

81.1. Charges for services provided by travel agencies (such as arranging for motel accommodations, meal accommodations, reservation of rental cars, booking cruises, reserving airline tickets, arranging bus tours or selling passage on international tours for their clients) are subject to tax. However, sales of or charges for the transportation of passengers in interstate commerce are exempt from the consumers sales and service tax and use tax. This is to be distinguished from charges for intrastate commerce which remains taxable unless otherwise exempt. For example, if a travel agency sells a roundtrip ticket from Charleston, West Virginia to Washington, D.C. and back, that sale would be exempt as a sale of transportation in interstate commerce, but any commission earned by the agency for that sale would not be exempt. But if the agency sells a roundtrip ticket from Charleston, West Virginia to Morgantown, West Virginia, then both the ticket sale and the commission would be taxable, because the transportation was in intrastate commerce.

81.2. A travel agency that arranges group tours should pay tax on items purchased on behalf of their clients at the time of purchase and should collect and remit consumers sales and service tax on any gross profit realized on the package deal. For example, tax should be paid on the purchase of hotel rooms on behalf of clients at the time of purchase, and tax should be collected on the gross profit from the sale of the package deal, including hotel room costs. "Gross profit" in this situation is the gross receipts from the sale, exclusive of the actual direct costs to the agency of the items in the package deal, but not exclusive of overhead costs and other ordinary costs of doing business.

81.3. Commissions earned by the travel agency from services provided to various businesses such as hotels, airlines, and bus lines are subject to sales and service or use tax. These persons should either collect and remit the tax due on these commissions or obtain a direct pay permit number from the entity for whom the service was rendered.

81.4. Persons engaged in rendering travel agency services are taxable on their purchases for use in their business.