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House approves tax exemption to clarify treatment of destination management companies
Summary
The House adopted Senate Bill 1‑28, clarifying that certain destination management company service fees are not subject to sales and use tax to avoid double taxation; sponsors said the change protects a sector that generates roughly $50 million annually in state revenue.
Senate Bill 1‑28 (sponsors Snyder and Kirkmeyer; House sponsor Representative Lukins) was presented on the floor to codify current practice that destination management companies (DMCs) — which purchase goods on behalf of clients for large events — should not have their service fees taxed at the point of client billing when the goods are already taxed at purchase.
Representative Lukins said the finance committee clarified the definition of "destination management company" and removed a repeal date; sponsors argued the bill prevents double taxation and protects the investments DMCs make in Colorado. Representative Zokay told the House the bill protects the industry and preserves approximately $50,000,000 in annual revenue generated by these companies for the state. The committee report was adopted and the bill passed second reading on the floor.
