I have to admit my travels and conference duties the past couples of weeks have kept me away for awhile. But I’m back, and it’s time to talk some shop. Yes, it is countdown to the rush of tax season for all Americans, but for the DMC industry, taxes have taken on a whole new meaning.
During our DMC Network Winter meeting, owners listened to a presentation on “Critical Tax Issues for DMCs.” After hearing the updates on this topic, I feel compelled to share what has been developing in the past couple of months.
Without getting too technical or in to the legality of the issue, California DMCs are facing an initiative by the California State Board of Equalization (SBOE) to reclassify DMCs as resellers, which is a huge misconception and would have major impacts on the operations of our businesses. Five other states have already passed this tax initiative and now CA has been put in the hot seat.
As an industry, we were offered “amnesty” from February 2005 to June 30th of this year to respond to this initiative. Utilizing this time to challenge the application of this reclassification, DMCs from around the nation, not just CA, have banded together, both financially and as an organization to put together a response that defends and defines the destination management business. The DMCs know, because we often serve as the model, that if the CA SBOE is successful, this will definitely move into other states effecting DMCs around the nation.
This brings up a slew of questions and thoughts as to how we are perceived as an industry and if the expertise, value, talent and capabilities of the destination management industry is really understood. A lot of hard work and energy is being put in to this project, especially from the Sales Task Force working with ADME, and we are keeping our fingers crossed for a positive outcome…I’m sure there will be more to come on this topic.
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