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A BILL TO BE ENTITLED
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AN ACT
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relating to the imposition of the sales and use tax on taxable items |
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sold or provided under certain contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter C, Chapter 151, Tax Code, is amended |
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by adding Section 151.0565 to read as follows: |
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Sec. 151.0565. TAXABLE ITEMS SOLD OR PROVIDED UNDER |
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DESTINATION MANAGEMENT SERVICES CONTRACTS. (a) In this section: |
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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 business entity that: |
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(A) is incorporated or is a limited liability |
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company; |
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(B) receives at least 80 percent of the entity's |
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annual total revenue from its entire business, as determined under |
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Section 171.1011, from providing or arranging for the provision of |
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a combination of at least four destination management services; |
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(C) 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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(D) has at least three full-time employees during |
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all or part of a calendar year; |
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(E) 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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(F) is not doing business as a caterer; |
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(G) does not provide services for weddings; and |
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(H) 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. |
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(3) "Qualified destination management services |
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contract" means a contract under which destination management |
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services are provided: |
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(A) by a qualified destination management |
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company that pays each person who sells or leases to the company |
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taxable items that will be consumed or used in performing the |
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contract for: |
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(i) the sale or use of those items; and |
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(ii) amounts charged by the person for |
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sales and use taxes imposed by this chapter; and |
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(B) to a client that is not an individual and |
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that: |
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(i) is a corporation, partnership, limited |
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liability company, trade association, or other business entity, |
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other than a social club or fraternal organization; |
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(ii) has its principal place of business |
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outside the county where the destination management services are to |
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be provided; and |
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(iii) agrees to pay the qualified |
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destination management company for all destination management |
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services provided to the client under the terms of the contract. |
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(b) A qualified destination management company is the |
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consumer of taxable items sold or otherwise provided under a |
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qualified destination management services contract, and the |
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destination management services provided under the contract are not |
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considered taxable services, as that term is defined by Section |
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151.0101. |
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SECTION 2. Section 151.0565, Tax Code, as added by this Act, |
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is a clarification of existing law and does not imply that the |
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former law may be construed as inconsistent with the law as added by |
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this Act. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2009. |