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Senate approves measure clarifying tax treatment of destination management companies
Summary
The Senate passed Senate Bill 128 after sponsors described it as a clarification to prevent double taxation of destination management companies; opponents warned it could set a precedent for industry carve-outs. The bill passed on a voice vote.
The Colorado Senate voted to adopt Senate Bill 128, a measure intended to clarify how sales and use tax applies to destination management companies (DMCs). Sponsors said the bill clarifies that DMCs are service providers and seeks to ensure tax is collected by the correct party rather than imposing double taxation.
Senator Snyder described committee work with the Department of Revenue and said the bill clarifies that “defining DMCs as service providers…does not alter the number of times sales taxes required to be paid,” adding that the measure reflects current practice and produced a zero fiscal note.
Opponents, including Senator Kip, said the proposal risks creating a carve‑out that exempts a for‑profit industry from normal sales‑tax rules and warned it could set a precedent for other industries to seek similar treatment. Senator Benzador and others raised concerns about the absence of a certification or process for retailers and the potential for confusion at the point of sale.
Discussion in the chamber also included technical edits the finance committee made at the request of the Department of Revenue. After floor discussion the motion to adopt the committee report and pass the bill was approved by voice vote and announced as adopted.
What’s next: the bill was ordered engrossed and will proceed to the next steps for enrollment and any executive action.
