81R28996 KLA-D
By: Hartnett, Jackson H.B. No. 3131
Substitute the following for H.B. No. 3131:
By: Hartnett C.S.H.B. No. 3131
A BILL TO BE ENTITLED
AN ACT
relating to the exclusion of certain payments from the total
revenue of a qualified destination management company for purposes
of the franchise tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 171.1011, Tax Code, is amended by adding
Subsection (g-6) to read as follows:
(g-6) A taxable entity that is a qualified destination
management company shall exclude from its total revenue, to the
extent included under Subsection (c)(1)(A), (c)(2)(A), or (c)(3),
payments made to other persons to provide services, labor, or
materials in connection with the provision of destination
management services. In this subsection:
(1) "Destination management services" means the
following services:
(A) transportation management;
(B) booking and managing entertainers;
(C) coordination of tours or recreational
activities;
(D) meeting, conference, or event registration;
(E) meeting, conference, or event staffing;
(F) event management; and
(G) meal coordination.
(2) "Qualified destination management company" means
a taxable entity that:
(A) receives at least 80 percent of the entity's
annual total revenue from its entire business from providing or
arranging for the provision of a combination of at least four
destination management services;
(B) maintains a permanent nonresidential office
from which the destination management services are provided or
arranged;
(C) has at least three full-time employees;
(D) spends at least one percent of the entity's
annual gross receipts from its entire business to market the
destinations with respect to which destination management services
are provided;
(E) has at least 80 percent of the clients with
which the entity enters into destination management services
contracts located outside this state;
(F) other than office equipment used in the
conduct of the entity's business, does not own equipment used to
directly provide destination management services, including motor
coaches, limousines, sedans, dance floors, decorative props,
lighting, podiums, sound or video equipment, or equipment for
catered meals;
(G) is not doing business as a caterer;
(H) does not provide services for weddings;
(I) does not own a venue at which events or
activities for which destination management services are provided
occur; and
(J) is not a subsidiary of another entity that,
and is not a member of an affiliated group another member of which:
(i) is doing business as, or owns or
operates another entity doing business as, a caterer; or
(ii) owns or operates a venue described by
Paragraph (I).
SECTION 2. This Act applies only to a report originally due
on or after the effective date of this Act.
SECTION 3. This Act takes effect January 1, 2010.