81R9427 KLA-D
By: Van de Putte S.B. No. 1347
A BILL TO BE ENTITLED
AN ACT
relating to the imposition of the sales and use tax on taxable items
sold or provided under certain contracts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter C, Chapter 151, Tax Code, is amended
by adding Section 151.0565 to read as follows:
Sec. 151.0565. TAXABLE ITEMS SOLD OR PROVIDED UNDER
DESTINATION MANAGEMENT SERVICES CONTRACTS. (a) In this section:
(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 business entity that:
(A) is incorporated or is a limited liability
company;
(B) receives at least 80 percent of the entity's
annual total revenue from its entire business, as determined under
Section 171.1011, from providing or arranging for the provision of
a combination of at least four destination management services;
(C) maintains a permanent nonresidential office
from which the destination management services are provided or
arranged;
(D) has at least three full-time employees during
all or part of a calendar year;
(E) 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;
(F) is not doing business as a caterer;
(G) does not provide services for weddings; and
(H) does not own a venue at which events or
activities for which destination management services are provided
occur.
(3) "Qualified destination management services
contract" means a contract under which destination management
services are provided:
(A) by a qualified destination management
company that pays each person who sells or leases to the company
taxable items that will be consumed or used in performing the
contract for:
(i) the sale or use of those items; and
(ii) amounts charged by the person for
sales and use taxes imposed by this chapter; and
(B) to a client that is not an individual and
that:
(i) is a corporation, partnership, limited
liability company, trade association, or other business entity,
other than a social club or fraternal organization;
(ii) has its principal place of business
outside the county where the destination management services are to
be provided; and
(iii) agrees to pay the qualified
destination management company for all destination management
services provided to the client under the terms of the contract.
(b) A qualified destination management company is the
consumer of taxable items sold or otherwise provided under a
qualified destination management services contract, and the
destination management services provided under the contract are not
considered taxable services, as that term is defined by Section
151.0101.
SECTION 2. Section 151.0565, Tax Code, as added by this Act,
is a clarification of existing law and does not imply that the
former law may be construed as inconsistent with the law as added by
this Act.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.