BILL NUMBER: AB 676	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 21, 2009

INTRODUCED BY   Assembly Member Jeffries
   (Coauthor: Assembly Member Galgiani)

                        FEBRUARY 25, 2009

   An act to add  Section 6018.9 to   and repeal
Section 6018.9 of  the Revenue and Taxation Code, relating to
taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 676, as amended, Jeffries. Sales and use taxes: consumer:
destination management company.
   The Sales and Use Tax Law imposes a tax on retailers measured by
the gross receipts from the sale of tangible personal property sold
at retail in this state, or on the storage, use, or other consumption
in this state of tangible personal property purchased from a
retailer for storage, use, or other consumption in this state. That
law, with certain exceptions, defines a retailer as a seller who
makes any retail sale of tangible personal property and as a person
who makes more than 2 retail sales of tangible personal property
during any 12-month period, and defines a retail sale as a sale of
tangible personal property for any purpose other than resale in the
regular course of business.
   This bill would provide  , until January 1, 2015,  that a
qualified destination management company  ,   as
defined,  is a consumer, and not a retailer, of tangible
personal property it provides to its clients pursuant to a qualified
contract  , as defined,  for destination management
services, so that the sale of the tangible personal property to the
destination management company is the retail sale subject to tax.
 This bill would state the intent of the Legislature that
this act is declaratory of existing law. 
   The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes
counties and cities to impose local sales and use taxes in conformity
with the Sales  ans   and  Use Tax Law,
and the Transactions and Use Tax Law authorizes districts, as
specified, to impose transactions and use taxes in conformity with
the Sales and Use Tax Law. Exemptions from state sales and use taxes
are incorporated in these taxes. Section 2230 of the Revenue and
Taxation Code provides that the state will reimburse counties and
cities for revenue losses caused by the enactment of sales and use
tax exemptions.
   This bill would provide that, notwithstanding Section 2230 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for sales and use tax revenues
lost by them pursuant to this bill. 
   This bill would take effect immediately as a tax levy. 

   This bill would take effect immediately as a tax levy, but its
operative date would depend on its effective date. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 6018.9 is added to the Revenue and Taxation
Code, to read:
   6018.9.  (a) A qualified destination management company is a
consumer of, and shall not be considered a retailer of, the tangible
personal property it provides to its client pursuant to a qualified
contract for destination management services.
   (b) For the purposes of this section:
   (1) "Destination management services" means the provision of four
or more of the following services:
   (A) Transportation.
   (B) Entertainment.
   (C) Meals.
   (D) Recreational activities.
   (E) Tours.
   (F) Registration.
   (G) Staffing.
   (2) "Qualified destination management company" means  an
  a  corporation that meets all of the following:
   (A) Is substantially engaged in the business of providing
destination management services. For purposes of this subparagraph,
"substantially" means that 80 percent or more of the gross sales are
derived from the business of providing destination management
services.
   (B) Is not doing business as a caterer.
   (C) Maintains a permanent nonresidential office in California 
from  which the destination management services are provided.
   (D) Has three or more full-time employees.
   (E) Expends  1 to 3   at least 1 
percent of its gross revenue annually to market California and local
destinations for tourism.
   (F) Does not own any equipment used to provide destination
management services, including, but not limited to, dance floors,
decorative props, lighting, podiums, sound or video systems, stages,
or equipment for catered meals. This condition shall not apply to
office equipment used in the conduct of the destination management
company's business.
   (G) Does not provide services for weddings.
   (3) "Qualified contract" means a contract between a qualified
destination management company and its client for destination
management services that meets all of the following conditions:
   (A) The client is a corporation, partnership, limited liability
company, trade association, or other business entity principally
located outside of the county in which the destination management
services are provided. The client is not an individual, social club,
or fraternal organization.
   (B) The client is responsible for paying the qualified destination
management company for all the destination management services
provided to the client.
   (C) The qualified destination management company is responsible
for paying all the vendors that sell or lease tangible personal
property to the qualified destination management company for the
contract services, including vendors' charges for sales tax
reimbursement or collection of use tax.
   (D) The destination management services occur  in part, or
all, of   on  two or more consecutive days. 
   (c) This section shall remain in effect only until January 1,
2015, and as of that date is repealed. 
  SEC. 2.  Notwithstanding Section 2230 of the Revenue and Taxation
Code, no appropriation is made by this act and the state shall not
reimburse any local agency for any sales and use tax revenues lost by
it under this act. 
  SEC. 3.   It is the intent of the Legislature that
this act is declaratory of existing law.  
  SEC. 4.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect. 
   SEC. 3.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect. However, the provisions of this act shall become
operative on the first day of the first calendar quarter commencing
more than 90 days after the effective date of this act.