SALT Report 2263 – The Arizona State Legislature passed a bill that exempts qualified Destination Management Companies from transaction privilege tax on any proceeds or income derived from contracted destination management services.
The terms of SB 1351 are as follows:
A qualified destination management company is one that receives at least 80% of its annual gross proceeds of sales or gross income from destination management services.
A qualified destination management company is the final consumer and user of any taxable tangible personal property, activity, or service that the QDMC arranges pursuant to a contract.
Destination management services are defined as the business of coordinating, designing, and implementing the delivery by a third party of four or more of the following:
- Food or beverage
- Recreational or amusement activity
- Event venue, and
- Theme décor
The exemptions provided in the bill apply retroactively to taxable years beginning January 1, 2002. Any claims for refund must be submitted to the DOR by December 31, 2013. Failure to file a claim by that date constitutes a waiver of the claim for refund.
Senate Bill 1351 passed in both the House and Senate and is awaiting final approval.
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