SB 128 — Sales & Use Tax Destination Management Company

SecondSENATE RegularBILL Session26-128 Seventy-fifthBYSENATOR(S)SnyderandKirkmeyer,Bright,Catlin,Frizell,Lindstedt, GeneralListon, AssemblyMarchman, STATEMullica, OFPelton COLORADOB., REREVISEDPelton ThisR., VersionRoberts, IncludesSimpson, AllColeman; Amendments Adopted in the Second House LLS NO.

26-0692.02also JedREPRESENTATIVE(S) Franklin x5484 SENATE BILL 26-128 SENATE SPONSORSHIP Snyder and Kirkmeyer, Bright, Catlin, Coleman, Frizell, Lindstedt, Liston, Marchman, Mullica, Pelton B., Pelton R., Roberts, Simpson HOUSE SPONSORSHIP Lukens and Zokaie, Gonzalez R., Marshall, McCluskieMcCluskie. d d e 6 a 0 S n , U g 1 H d r e p Senate Committees House Committees R A Finance Finance 3 n 6 A BILL FOR AN ACT d 0 S e 2 C ONCERNING A SALES AND USE TAXATION EXEMPTION ON CERTAIN U R 3 H n 1i FEES CHARGED BY DESTINATION MANAGEMENT COMPANIES .

dC pONCERNING d A nSALES BillAND SummaryUSE mTAXATION AEXEMPTION (Note:ON CERTAIN FEES CHARGED BY DESTINATION MANAGEMENT COMPANIES .

This summary applies to this bill as introduced and does notreflectanyamendmentsthatmaybesubsequentlyadopted.Ifthisbill e n 6 passes third reading in the house of introduction, a bill summary that m 0 applies to the reengrossed version of this bill will be available at T n , A U 2 http://leg.colorado.gov.) E i h S a r R M Destination management companies (DMCs) are companies that r have specialized local knowledge, expertise, and resources and provide 3 or arrange events, tours, transportation, and other logistics for events (destination management services).

Currently, DMCs are charged sales n and use tax on goods and services that they purchase in connection with d 6 providingdestinationmanagementservicesinColorado.Thebillexempts e 0 T R , A n 4 E d h Shading denotes HOUSE amendment.

Double underlining denotes SENATE amendment.

S e r Capital letters or bold & italic numbers indicate new material to be added to existing law.n M Dashes through the words or numbers indicate deletions from existing law.

m A a DMC from being assessed sales and use tax on fees charged by the DMC for the provision of destination management services to clients.

SECTION1.SECTION 1.

InColoradoRevisedStatutes,amend39-26-701asIn Colorado Revised Statutes, amend 39-26-701 as follows:

(1) "Storage" or "storing" means any keeping or retention of, or exercise of dominion or control over, tangible personal property in this state.Dstate. ESTINATIONMANAGEMENTCOMPANY "MEANSAPERSON THAT :

(a)"DESTINATION ISMANAGEMENT PRIMARILYCOMPANY ENGAGED" INMEANS THEA BUSINESSPERSON OFTHAT PROVIDING: OR ARRANGING FOR THE PROVISION OF AT LEAST SIX DESTINATION MANAGEMENT SERVICES IN COLORADO ;

(b)________ HASCapital ATletters LEASTor THREEbold FULLTIME& EMPLOYEESitalic ;ANDnumbers (c)indicate DOESnew NOTmaterial PREPAREadded ORto SERVEexisting BEVERAGES,MEALSlaw; ,OR OTHER FOOD PRODUCTS AND DOES NOT OWN OR OPERATE A VENUE AT WHICH DESTINATION MANAGEMENT SERVICES ARE PROVIDED ,EITHER DIRECTLY OR THROUGH A FINANCIAL INTEREST IN ANOTHER PERSON.

dashes through words or numbers indicate deletions from existing law and such material is not part of the act.

(a) IS PRIMARILY ENGAGED IN THE BUSINESS OF PROVIDING OR ARRANGING FOR THE PROVISION OF AT LEAST SIX DESTINATION MANAGEMENT SERVICES IN C OLORADO ;

(b) HAS AT LEAST THREE FULL-TIME EMPLOYEES ;

AND (c) D OES NOT PREPARE OR SERVE BEVERAGES ,MEALS ,OR OTHER FOOD PRODUCTS AND DOES NOT OWN OR OPERATE A VENUE AT WHICH DESTINATIONMANAGEMENTSERVICESAREPROVIDED EITHERDIRECTLYOR THROUGH A FINANCIAL INTEREST IN ANOTHER PERSON .

(b) COORDINATING TOURS OR RECREATIONAL ACTIVITIES;ACTIVITIES ;

(c) ORGANIZINGMEETINGORGANIZING MEETING ,CONFERENCE OREVENTREGISTRATION,OR EVENT REGISTRATION ;

(d) STAFFINGS TAFFING M EETINGS,CONFERENCESEETINGS, ,TRANSPORTATIONCONFERENCES ,OR, TRANSPORTATION , OR OTHER EVENTS ;

-2- 128 (e) EVENT MANAGEMENT ;

(f) CATERING OR MEAL COORDINATION;COORDINATION ;

(g) PROVIDINGP ROVIDING SHUTTLE SYSTEM SERVICES,INCLUDINGSERVICES ,INCLUDING VEHICLE STAGING RADIOCOMMUNICATIONS,RADIO ,SIGNAGE,ANDROUTINGSERVICESCOMMUNICATIONS OR,SIGNAGE ,AND ROUTING SERVICES ;OR (h) PROVIDINGPROVIDINGAIRPORTMEET AIRPORT-AND MEETANDGREETSERVICES -GREET,INCLUDINGTHE SERVICES,INCLUDINGPROVISION THEOF PROVISIONOFAIRPORTPERMITSAIRPORT PERMITS ,MANIFEST MANAGEMENT SERVICES , PORTERAGE ,AND PASSENGER GREETING SERVICES.SERVICES .

9 (3) "TORAGE"STORAGE "OR" "STORING"MEANSANYKEEPINGORRETENTIONOR STORING "MEANS ANY KEEPING OR RETENTION OF,OR EXERCISE OF DOMINION OR CONTROL OVER,TANGIBLEOVER ,TANGIBLE PERSONAL PROPERTY IN THE STAT.STATE.

PAGE 2-SENATE BILL 26-128 39-26-735.

Destination management fees - tax preference performance statement -legislative- legislative declaration.

(1) INNACCORDANCE ACCORDANCEWITHSECTION WITH39-21-304(1),WHICH SECTIONREQUIRES 39-21-304EACH (1),WHICHBILL REQUIRESEACHBILLTHATCREATESANEWTAXEXPENDITURETOINCLUDETHAT ATAXPREFERENCECREATES A NEW TAX EXPENDITURE TO INCLUDE A TAX PREFERENCE PERFORMANCE STATEMENTASPARTSTATEMENT OFASTATUTORYAS LEGISLATIVEDECLARATIONPART ,THEGENERALASSEMBLYHEREBYFINDSANDOF A STATUTORY LEGISLATIVE DECLARATION ,THE GENERAL ASSEMBLY HEREBY FINDS AND DECLARES THAT :

(a) TTHE HE GENERAL LEGISLATIVE PURPOSE OF THE EXEMPTION ALLOWEDBYTHISSECTIONISTOINCENTIVIZEDESTINATIONMANAGEMENTALLOWED COMPANIESBY THIS SECTION IS TO BRINGINCENTIVIZE DESTINATION MANAGEMENT BUSINESSCOMPANIESTOBRINGDESTINATIONMANAGEMENTBUSINESSTOTHESTATE TO THE STATE ;

(b) THET HE SPECIFIC LEGISLATIVE PURPOSE OF THE EXEMPTION ALLOWED BY THIS SECTION ISTOIS TO PREVENT THE IMPOSITION OFSALESOF SALES AND USE TAX ON THE DESTINATION MANAGEMENT COMPANY S SUBSEQUENT -3- 128 PROVISION OFDESTINATIONOF DESTINATION MANAGEMENT SERVICES TO A CLIENT OFTHEOF THE DESTINATION MANAGEMENT COMPANY ;AND (c) THET HE GENERAL ASSEMBLY AND THE STATE AUDITOR SHALL MEASURE THE EFFECTIVENESS OF THE EXEMPTION ALLOWED BY THIS SECTION BASED ON THE STATEWIDE ECONOMIC IMPACT OF DESTINATION MANAGEMENT COMPANIES .

(2) NOTWITHSTANDINGANYOTHERPROVISIONOFLAWNOTWITHSTANDING ANY OTHER PROVISION OF LAW ,BEGINNING JULY 1, 2027THE2027,THE SALE,STORAGESALE, STORAGE ,USE,OR CONSUMPTION OF TANGIBLE PERSONALPERSONALPROPERTY PROPERTY,COMMODITIES ,,ORSERVICESSOLDBYADESTINATION COMMODITIES , OR SERVICES SOLD BY A DESTINATION MANAGEMENT COMPANYCOMPANYARE ARE EXEMPT FROMFROMTAXATIONPURSUANT TAXATIONTOPART PURSUANTOR TO PART 1OR2 PART2OF OFTHISTHIS ARTICLE26,IFTHEARTICLE 26,IF THE DESTINATION MANAGEMENT COMPANY HAS PAID TO THE STATE THE APPLICABLE SALES OR USE TAX ON SUCHSUCHTANGIBLEPERSONALPROPERTY TANGIBLE,COMMODITIES PERSONAL,ORSERVICESUPONITS PROPERT,COMMODITIESACQUISITION. ,OR SERVICES UPON ITS ACQUISITI.N (3) N OTWITHSTANDING SECTION 39-21-304 (4),THIS SECTION DOES NOT REPEAL.

(3) NOTWITHSTANDING SECTION 39-21-304(4),THIS SECTION DOES NOT REPEAL .

on the day following the expiration of the ninety-dayperiodafterfinaladjournmentofthegeneralassembly(Augustninety-day period after final adjournment of the general assembly (August 12, 2026, if adjournment sine die is on May 13, 2026);

except that, if a referendumPAGE petition3-SENATE isBILL filed26-128 pursuantreferendumpetitionisfiledpursuanttosection1(3)ofarticleVofthestate to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approvedapprovedbythepeopleatthegeneralelectiontobeheldinNovember2026 by the people at the general election to be held in November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.

-4-____________________________ 128____________________________ James Rashad Coleman, Sr.

Julie McCluskie PRESIDENT OF SPEAKER OF THE HOUSE THE SENATE OF REPRESENTATIVES ____________________________ ____________________________ Esther van Mourik Vanessa Reilly SECRETARY OF CHIEF CLERK OF THE HOUSE THE SENATE OF REPRESENTATIVES APPROVED________________________________________ (Date and Time) _________________________________________ Jared S.

Polis GOVERNOR OF THE STATE OF COLORADO PAGE 4-SENATE BILL 26-128