2023 Texas Statutes › Tax Code › Title 2 - State Taxation › Subtitle E - Sales, Excise, and Use Taxes › Chapter 151 - Limited Sales, Excise, and Use Tax › Subchapter C. Imposition and Collection of Sales Tax › Section 151.0565. Taxable Items Sold or Provided Under Destination Management Services Contracts

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 vehicle management;
(B)  booking and managing entertainers;
(C)  coordination of tours or recreational activities;
(D)  meeting, conference, or event registration;
(E)  meeting, conference, transportation, or event staffing;
(F)  event management;
(G)  meal coordination;
(H)  shuttle system services, including vehicle staging, radio communications, signage, and routing services;  and
(I)  airport meet-and-greet services, including the provision of airport permits, manifest management services, porterage, and passenger greeting services.
(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 a combination of at least six 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)  maintains a general liability insurance policy with a limit of at least $1 million;
(F)  during the preceding tax year, had at least 80 percent of the entity's client contracts for:
(i)  clients from outside this state who were determined by a contracting entity outside this state;  or
(ii)  clients from outside this state who were program attendees staying in a hotel in 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)  does not prepare or serve beverages, meals, or other food products, but may procure catering services on behalf of the entity's clients;
(I)  does not provide services for weddings;
(J)  does not own or operate a venue at which events or activities for which destination management services are provided occur; and
(K)  is not a member of an affiliated group, as that term is defined by Section 171.0001, another member of which:
(i)  prepares or serves beverages, meals, or other food products; 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.
Added by Acts 2009, 81st Leg., R.S., Ch. 1360 (S.B. 636), Sec. 2, eff. September 1, 2009.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 1061 (H.B. 3169), Sec. 1, eff. September 1, 2013.