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A BILL TO BE ENTITLED
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AN ACT
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relating to the exclusion of certain payments from the total |
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revenue of a qualified destination management company for purposes |
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of the franchise tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 171.1011, Tax Code, is amended by adding |
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Subsection (g-6) to read as follows: |
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(g-6) A taxable entity that is a qualified destination |
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management company shall exclude from its total revenue, to the |
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extent included under Subsection (c)(1)(A), (c)(2)(A), or (c)(3), |
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payments made to other persons to provide services, labor, or |
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materials in connection with the provision of destination |
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management services. In this subsection: |
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(1) "Destination management services" means the |
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following services: |
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(A) transportation management; |
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(B) booking and managing entertainers; |
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(C) coordination of tours or recreational |
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activities; |
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(D) meeting, conference, or event registration; |
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(E) meeting, conference, or event staffing; |
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(F) event management; and |
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(G) meal coordination. |
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(2) "Qualified destination management company" means |
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a taxable entity that: |
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(A) receives at least 80 percent of the entity's |
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annual total revenue from its entire business from providing or |
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arranging for the provision of a combination of at least four |
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destination management services; |
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(B) maintains a permanent nonresidential office |
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from which the destination management services are provided or |
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arranged; |
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(C) has at least three full-time employees; |
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(D) spends at least one percent of the entity's |
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annual gross receipts from its entire business to market the |
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destinations with respect to which destination management services |
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are provided; |
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(E) has at least 80 percent of the clients with |
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which the entity enters into destination management services |
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contracts located outside this state; |
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(F) other than office equipment used in the |
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conduct of the entity's business, does not own equipment used to |
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directly provide destination management services, including motor |
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coaches, limousines, sedans, dance floors, decorative props, |
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lighting, podiums, sound or video equipment, or equipment for |
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catered meals; |
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(G) is not doing business as a caterer; |
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(H) does not provide services for weddings; |
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(I) does not own a venue at which events or |
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activities for which destination management services are provided |
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occur; and |
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(J) is not a subsidiary of another entity that, |
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and is not a member of an affiliated group another member of which: |
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(i) is doing business as, or owns or |
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operates another entity doing business as, a caterer; or |
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(ii) owns or operates a venue described by |
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Paragraph (I). |
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SECTION 2. This Act applies only to a report originally due |
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on or after the effective date of this Act. |
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SECTION 3. This Act takes effect January 1, 2010. |