Starting a travel agency in Michigan involves knowing the state’s laws concerning hospitality and personal-service enterprises. According to Michigan.gov, the state’s official website, there is no required state license for starting a travel agency. However, as with all other businesses in the state, there are certain requirements that both home-based and corporate travel agencies in Michigan must meet prior to operating.
Employment Identification Number (EIN)
Also known as the Employer Tax ID and Form SS-4, the EIN is a federal tax identification number which identifies a business as a tax-paying entity. It is a requirement for all types of business organizations, partnerships and corporations. An EIN is required for a Michigan travel agency if it has more than one employee, is a partnership or a corporation, and files employee tax returns. An EIN is obtained from the U.S. Internal Revenue Service.
Sales Tax License
According to the Michigan Economic Development Corporation, no business permit is required to set up a travel agency in the state. However, you may need a sales tax license if you will provide certain tangible services, such as the purchase of airline tickets or tour packages.
As with all business enterprises, a travel agency must be defined by the type of business structure--sole proprietorship, partnership or corporation. This determines the type of paperwork that regulates the business as well as the kind of taxes it needs to pay.
State Tax Registration
All businesses operating in Michigan must register for certain tax-specific licenses, permits and identification numbers, including a seller's permit, income tax withholding and unemployment insurance tax.
Seller of Travel Bond
According to Judge Thomas A. Dickerson, author of The Travel Law, travel agents in the United States are required to obtain a seller of travel bond. This is because their job involves the handling of large amounts of money and payments to service bureaus and other providers. The bond safeguards consumers and service providers from fraudulent acts by the travel agent. It allows these service providers to file a claim against the bond to regain any potential losses should a travel agent fail to turn over the payments entrusted to him. A valid claim means the travel agency must pay the company all payments due.
Education and Certification
While there are no licensing requirements for travel agents in Michigan, they may obtain further education, such as certificate courses or associate degrees, at travel agent schools. In Michigan, schools such as Lansing Community College and Western Michigan University offer nondegree, completion of certificate courses in travel agency operations. According to the Western Michigan University’s website, there are no specific prerequisites for these certificate programs.
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