Bill Text: TX HB3169 | 2013-2014 | 83rd Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the imposition of the sales and use tax on certain taxable items.

Spectrum: Bipartisan Bill

Status: (Passed) 2013-06-14 - Effective on 9/1/13 [HB3169 Detail]

Download: Texas-2013-HB3169-Introduced.html
 
 
  By: Bohac H.B. No. 3169
 
 
 
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.  Section 151.0565, Tax Code, is amended by
  amending Subsection (a) and adding Subsection (c) to read as
  follows:
         (a)  In this section:
               (1)  "Destination management services" means the
  following services [when provided under a qualified destination
  management services contract]:
                     (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 or logistics 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 providing or arranging for the provision
  of 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;
                     (E)  spends at least one percent of the entity's
  annual gross receipts to market the destinations with respect to
  which destination management services are provided, including
  gross receipts spent for labor expenses relating to that activity;
                     (F)  has at least 80 percent of the entity's
  clients described by Subdivision (3)(A) located outside this state;
                     (G)  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;
                     (H)  is not doing business as a caterer;
                     (I)  does not provide services for weddings;
                     (J)  does not own a venue at which events or
  activities for which destination management services are provided
  occur; and
                     (K)  is not a subsidiary of another entity that,
  and is not a member of an affiliated group, as that term is defined
  by Section 171.0001, 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 (J).
               (3)  "Qualified destination management services
  contract" means a contract under which at least three of the
  destination management services listed in Subdivision (1) are
  provided:
                     (A)  in this state 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; and
                     (B)  by a qualified destination management
  company that pays or accrues liability for the payment of taxes
  imposed by this chapter on purchases of taxable items that will be
  consumed or used by the company in performing 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.
         (c)  For purposes of this section, the following activities
  are considered as marketing a destination:
               (1)  promoting the destination for prospective
  meeting, incentive, and convention clients, regardless of whether
  the activity promotes the entity engaging in the activity and
  including the following activities:
                     (A)  participating in trade shows;
                     (B)  making sales calls;
                     (C)  conducting site inspections;
                     (D)  participating in familiarization trips; and
                     (E)  marketing license and/or membership fees;
               (2)  attending or sponsoring an industry conference
  while marketing the destination;
               (3)  creating a destination proposal with respect to
  the destination;
               (4)  disseminating gifts or other materials that
  promote the destination; and
               (5)  promoting the destination by electronic means.
         SECTION 2.  The change in law made by this Act does not
  affect tax liability accruing before the effective date of this
  Act.  That liability continues in effect as if this Act had not been
  enacted, and the former law is continued in effect for the
  collection of taxes due and for civil and criminal enforcement of
  the liability for those taxes.
         SECTION 3.  This Act takes effect September 1, 2013.
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