| 1 | 1 | | 81R9427 KLA-D |
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| 2 | 2 | | By: Van de Putte S.B. No. 1347 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the imposition of the sales and use tax on taxable items |
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| 8 | 8 | | sold or provided under certain contracts. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subchapter C, Chapter 151, Tax Code, is amended |
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| 11 | 11 | | by adding Section 151.0565 to read as follows: |
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| 12 | 12 | | Sec. 151.0565. TAXABLE ITEMS SOLD OR PROVIDED UNDER |
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| 13 | 13 | | DESTINATION MANAGEMENT SERVICES CONTRACTS. (a) In this section: |
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| 14 | 14 | | (1) "Destination management services" means the |
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| 15 | 15 | | following services: |
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| 16 | 16 | | (A) transportation management; |
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| 17 | 17 | | (B) booking and managing entertainers; |
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| 18 | 18 | | (C) coordination of tours or recreational |
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| 19 | 19 | | activities; |
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| 20 | 20 | | (D) meeting, conference, or event registration; |
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| 21 | 21 | | (E) meeting, conference, or event staffing; |
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| 22 | 22 | | (F) event management; and |
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| 23 | 23 | | (G) meal coordination. |
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| 24 | 24 | | (2) "Qualified destination management company" means |
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| 25 | 25 | | a business entity that: |
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| 26 | 26 | | (A) is incorporated or is a limited liability |
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| 27 | 27 | | company; |
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| 28 | 28 | | (B) receives at least 80 percent of the entity's |
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| 29 | 29 | | annual total revenue from its entire business, as determined under |
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| 30 | 30 | | Section 171.1011, from providing or arranging for the provision of |
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| 31 | 31 | | a combination of at least four destination management services; |
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| 32 | 32 | | (C) maintains a permanent nonresidential office |
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| 33 | 33 | | from which the destination management services are provided or |
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| 34 | 34 | | arranged; |
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| 35 | 35 | | (D) has at least three full-time employees during |
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| 36 | 36 | | all or part of a calendar year; |
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| 37 | 37 | | (E) other than office equipment used in the |
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| 38 | 38 | | conduct of the entity's business, does not own equipment used to |
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| 39 | 39 | | directly provide destination management services, including motor |
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| 40 | 40 | | coaches, limousines, sedans, dance floors, decorative props, |
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| 41 | 41 | | lighting, podiums, sound or video equipment, or equipment for |
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| 42 | 42 | | catered meals; |
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| 43 | 43 | | (F) is not doing business as a caterer; |
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| 44 | 44 | | (G) does not provide services for weddings; and |
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| 45 | 45 | | (H) does not own a venue at which events or |
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| 46 | 46 | | activities for which destination management services are provided |
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| 47 | 47 | | occur. |
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| 48 | 48 | | (3) "Qualified destination management services |
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| 49 | 49 | | contract" means a contract under which destination management |
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| 50 | 50 | | services are provided: |
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| 51 | 51 | | (A) by a qualified destination management |
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| 52 | 52 | | company that pays each person who sells or leases to the company |
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| 53 | 53 | | taxable items that will be consumed or used in performing the |
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| 54 | 54 | | contract for: |
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| 55 | 55 | | (i) the sale or use of those items; and |
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| 56 | 56 | | (ii) amounts charged by the person for |
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| 57 | 57 | | sales and use taxes imposed by this chapter; and |
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| 58 | 58 | | (B) to a client that is not an individual and |
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| 59 | 59 | | that: |
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| 60 | 60 | | (i) is a corporation, partnership, limited |
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| 61 | 61 | | liability company, trade association, or other business entity, |
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| 62 | 62 | | other than a social club or fraternal organization; |
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| 63 | 63 | | (ii) has its principal place of business |
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| 64 | 64 | | outside the county where the destination management services are to |
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| 65 | 65 | | be provided; and |
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| 66 | 66 | | (iii) agrees to pay the qualified |
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| 67 | 67 | | destination management company for all destination management |
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| 68 | 68 | | services provided to the client under the terms of the contract. |
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| 69 | 69 | | (b) A qualified destination management company is the |
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| 70 | 70 | | consumer of taxable items sold or otherwise provided under a |
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| 71 | 71 | | qualified destination management services contract, and the |
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| 72 | 72 | | destination management services provided under the contract are not |
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| 73 | 73 | | considered taxable services, as that term is defined by Section |
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| 74 | 74 | | 151.0101. |
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| 75 | 75 | | SECTION 2. Section 151.0565, Tax Code, as added by this Act, |
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| 76 | 76 | | is a clarification of existing law and does not imply that the |
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| 77 | 77 | | former law may be construed as inconsistent with the law as added by |
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| 78 | 78 | | this Act. |
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| 79 | 79 | | SECTION 3. This Act takes effect immediately if it receives |
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| 80 | 80 | | a vote of two-thirds of all the members elected to each house, as |
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| 81 | 81 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 82 | 82 | | Act does not receive the vote necessary for immediate effect, this |
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| 83 | 83 | | Act takes effect September 1, 2009. |
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