U.S. Sales Tax Rules for International Travel Agents

U.S. Sales Tax Rules for International Travel Agents: What You Actually Need to Know

At Antravia, we work with international travel agents and DMCs who are growing fast and starting to sell more into the U.S. market. One of the first questions they ask is whether they need to deal with U.S. sales tax.

The answer depends on what you're selling, where you're based, and how your business is structured. The rules are different from what many agents are used to in Europe, the UK, or Asia. And the penalties for getting it wrong can be expensive, even if you’re based thousands of miles away.

This blog breaks down the essentials of U.S. sales tax for travel sellers who are not based in the United States but serve U.S. clients or sell U.S.-based travel.

First, what is U.S. Sales Tax?

Sales tax in the U.S. is not federal. It is state-based, and each state sets its own rules. There are over 10,000 different sales tax jurisdictions when you include counties and cities.

Most services sold internationally are not subject to sales tax. But the minute you sell something with a U.S. component, like a hotel night, domestic flight, car rental, or tour that takes place on U.S. soil, you may trigger sales tax.

Some states tax all travel services that involve in-state activity. Others are more lenient. Some only care if you have a physical presence in the state. Others apply “economic nexus” rules, which kick in once you hit a certain dollar or booking threshold, even if you’re abroad.

What Counts as a Taxable Sale?

Sales tax in the U.S. is set by states and local jurisdictions. There are over 10,000 tax zones, each with its own rules.

Here’s when you may trigger U.S. sales tax:

• You sell a hotel, car hire, or tour that takes place inside the U.S.

• You book U.S. land components on behalf of a U.S. resident (Note - The taxability of a sale depends on the location where the service (e.g., hotel stay or tour) is delivered or consumed, so in this case, within a U.S. state, regardless of the buyer's residence. Nexus and tax obligations for remote sellers, including foreign travel agents, are triggered by sales delivered into the state, not by whether the customer is a U.S. resident. For example, booking a U.S. hotel for a non-U.S. resident (e.g., a European tourist) would still create a taxable sale in that state if thresholds are met, as the service occurs in the U.S.)

• You hit certain nexus thresholds (usually $100,000 in sales or 200 bookings/transactions - however, not all states use both criteria and many have shifted to sales-only thresholds (e.g., $100,000 sales with no transaction count), and a few use different amounts (e.g., California at $500,000 sales) )

If you’re only booking flights or international cruises, you may be exempt, but it’s essential to check by state, as for example, domestic U.S. flights and international air tickets are generally exempt from state sales tax (subject instead to federal excise taxes handled by airlines), and cruise fares are typically not subject to sales tax. However, add-ons like pre-cruise hotel stays or U.S. port excursions could trigger state sales or lodging taxes separately, and some states might tax related services (e.g., transportation fees).

Do you have “Nexus” in the U.S.?

Nexus just means a connection strong enough for a state to require you to collect and remit sales tax.

You may have nexus if:

• You operate through a U.S. entity and sell travel involving that state

• You use a U.S.-based fulfillment partner or have staff or contractors in that state

• You hit an annual revenue or transaction threshold for that state (often $100,000 or 200 transactions - or as discussed above)

Each state sets its own rules, and they do change. You don’t automatically trigger nexus by working with U.S. clients. But if you’re selling U.S. land packages, that’s a different story.

We’ve helped clients identify whether nexus exists, and if so, which specific products are taxable and how to report them correctly.

What about Hotels, Tours, and Cruise Add-Ons?

If you’re selling U.S. hotels, theme park tickets, car hire, or land-based excursions that take place in the United States, you may need to collect and remit sales tax in the state where the service is delivered.

Let’s say you’re based in Spain and sell a full California road trip. If your company is booking and packaging the hotel and car directly, you could be seen as the “seller of record” and become responsible for collecting California sales tax.

But if you sell through a registered U.S. tour operator or use a platform that collects tax on your behalf, your obligation may shift. The legal and tax details depend on how you’re invoicing, who the client pays, and what your contracts say.

Are Flights and Cruises Taxable?

Generally, no. U.S. domestic flights and international airline tickets are subject to federal excise tax, which is handled by the airline or ticketing platform. As a travel advisor, you don’t need to collect this yourself.

Cruises are a bit different. If you are selling a cruise departing from a U.S. port, and you include hotel nights, transfers, or excursions, you need to review those parts separately. The cruise fare itself is usually not taxable from your end, but the land-based extras might be.

Do you need to register for U.S. Sales Tax?

Only if you meet the threshold for nexus and are selling taxable products.

If you do need to register, it is done state by state. There is no single federal registration. Some states offer free online registration, others require local agents or additional filings. You’ll also need to file monthly, quarterly, or annual returns depending on the volume of sales.

We recommend reviewing this early, not after your business has scaled. Once you owe sales tax, the penalties for late registration can add up quickly and especially for non-residents unfamiliar with the system.

What if you use a Host Agency?

If you operate under a U.S. host agency and the host is the legal seller of record, they may be responsible for handling sales tax. However, this depends on your agreement.

In some setups, the host handles ticketing and supplier payments, which can shield you from sales tax exposure. In others, you’re operating under your own brand and making independent sales. That distinction matters.

It’s worth reviewing your host contract to confirm whether they are collecting tax and how liabilities are handled. This is something we regularly review with our clients.

Final Thought

U.S. sales tax is not something you want to ignore. But it’s also not something to panic over, so if you’re an international travel seller, the key is understanding where your risk is. Are you selling U.S. products? Are you using your own U.S. entity? Are you handling funds yourself or through a platform? Once you know the structure, it becomes much easier to manage the rules.

At Antravia, we help travel advisors and DMCs navigate these questions clearly and calmly. No scare tactics. No jargon. Just solid advice tailored to your actual business.

Not sure if U.S. sales tax applies to you?
Book a one-off session with Antravia. We’ll review your structure and products and give you a clear picture of your obligations.

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⚠️ DISCLAIMER: The information in this article reflects the complex landscape of U.S. Federal Tax Law as of October 2025, including recently proposed and enacted legislative changes affecting the 2025 tax year. This fact-check is a high-level overview based on publicly available IRS and FinCEN guidance as of October 2025. Tax laws are subject to frequent change. This is not legal, financial, or tax advice. Always consult with your qualified CPA or tax professional knowledgeable in hospitality real estate before making any tax-related decisions. See also our Disclaimer page