42-5039. Qualified destination management companies; definitions

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A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A. A qualified destination management company is not subject to transaction privilege tax under this chapter on the gross proceeds of sales or gross income derived from a qualified contract for destination management services. The gross proceeds of sales or gross income derived by a qualified destination management company from transactions that are not part of a qualified contract for destination management services are subject to tax if otherwise taxable under this chapter.

B. A qualified destination management company is a final consumer and user of any tangible personal property, activity or service subject to transaction privilege tax under article 2 of this chapter that the qualified destination management company arranges pursuant to a qualified contract for destination management services.

C. For the purposes of this section:

1. "Destination management services" means the business of coordinating, designing and implementing the delivery by a third party of four or more of the following:

(a)Transportation.

(b)Entertainment.

(c)Food or beverage.

(d)Recreational or amusement activity.

(e)Tours.

(f)Event venue.

(g)Theme decor.

2. "Qualified contract" means a contract for the provision of destination management services by a qualified destination management company where both of the following apply:

(a)The qualified destination management company receives payment from or on behalf of the qualified destination management company's client for the cost of the destination management services arranged by the qualified destination management company.

(b)The qualified destination management company pays the vendor supplying the destination management services arranged by the qualified destination management company including any applicable transaction privilege tax or collection of use tax charged by the vendor to the qualified destination management company.

3. "Qualified destination management company" means a person that receives on an annual basis at least eighty per cent of its gross proceeds of sales or gross income derived from destination management services.