Committee clears bill clarifying tax treatment for destination management companies

The House Finance Committee on Wednesday moved Senate Bill 128 to the Committee of the Whole with a favorable recommendation after testimony from destination management companies, caterers and hospitality groups.

Sponsor Representative Lukens and co‑sponsors said the bill clarifies that fees charged by destination management companies for professional services are not subject to sales tax, avoiding what proponents described as double taxation on services that procure goods on clients’ behalf.

Nicole Marsh, founder of Imprint Events Group, told lawmakers DMCs coordinate dozens of Colorado vendors and already pay sales tax on the tangible goods they purchase. "If Colorado becomes more expensive or less competitive, these programs can easily move elsewhere," Marsh said, asking the committee to support the bill.

Industry witnesses said the bill preserves local economic impact by allowing DMCs to bill clients in customary ways without creating new tax liabilities for clients or vendors. Representative Lukens offered amendment L2 to remove circular language, clarify the DMC definition and strike a repeal date; sponsors said the amendment preserves existing tax practice and keeps the fiscal note at $0.

After adopting L2, the committee voted to send SB128 to the Committee of the Whole with a favorable recommendation; the motion passed 9–1 with one member excused.

The bill now goes to Committee of the Whole for further floor consideration.