Tax Guide for Destination Management Companies

Please note: The information contained in this guide is based on the Board of Equalization’s Key Event's Inc. memorandum opinion issued on November 14, 2017. Please continue to check this page for the most current information regarding the application of tax to Destination Management Companies.

A Destination Management Company (DMC) is a type of a travel service company that provides knowledge, expertise, and resources for designing, organizing, and implementing events and activities for clients. DMCs do not include businesses that operate as a caterer or as a wedding planner. Examples of events and activities coordinated by DMCs include:

  • Transportation
  • Entertainment
  • Meals
  • Meetings
  • Team building retreats
  • Theme parties
  • Outdoor activities
  • Tours and sightseeing
  • Program logistics

How Tax Generally Applies to DMCs

Pursuant to the Key Events, Inc. memorandum opinion, DMCs are generally service providers and consumers of tangible personal property they transfer to clients as part of their services. As such, DMCs must pay either sales or use tax to their vendors at the time they purchase tangible personal property to be transferred to clients as part of their services. A DMC's charges for services, including the transfer of property as part of the services, are not subject to sales tax because the DMC is not considered to be selling the property to its clients.

If a DMC makes purchases from an out-of-state retailer that does not collect California tax, the DMC is responsible for paying the use tax on the use of tangible personal property it consumes in performing its services. To calculate the amount of use tax due, use the sales and use tax rate applicable to the place in California where the item is used, stored, or otherwise consumed and apply it to the total purchase price. A listing of current and historical tax rates can be found on our California City & County Sales & Use Tax Rates webpage. For more information on use tax and how your business can pay any use tax due, please see our webpage, California Use Tax, Good for You. Good for California.

DMCs that make sales of tangible personal property that are not part of the services they provide to their clients or other persons are required to obtain seller’s permits, file sales and use tax returns, and pay tax on their taxable sales. For example, if a DMC makes sales of mugs or t-shirts with the DMC logo, those sales would not be considered a part of the service the DMC provided to its clients and the DMC would be required to pay sales tax on those sales.


If your DMC makes retail sales of tangible personal property which are not part of the services the DMC provides to clients or other persons, you must register with the CDTFA for a seller's permit and file sales and use tax returns. You can use our online registration system to register with us for a seller's permit.

If your DMC does not make retail sales of tangible personal property, the DMC is considered the consumer of all tangible personal property transferred as part of its services and is not required to obtain a seller’s permit.

Filing and Payments

Helpful Resources

  • Memorandum Opinion – Board of Equalization Memorandum Opinion issued November 14, 2017 for Key Events, Inc. regarding the application of tax for DMCs.
  • Sign Up for CDTFA Updates – Subscribe to our email lists and receive the latest news, newsletters, tax and fee updates, public meeting agendas, and other announcements.
  • Get It In Writing! – The Sales and Use Tax Law can be complex, and you are encouraged to put your tax questions in writing.

If You Need Help

If at any time you need assistance with topics included in this guide – or with topics not included – feel free to contact us by telephone or email. For contact information and hours of operation please see our How to Contact Us webpage.

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