A well-draftedcan allocate most risk and responsibility between planners and venues, but one area that generally can't be negotiated is the impact of various laws and regulations.
For instance, while a planner and hotelier can often negotiate the amount of a service charge, whether or not that service charge is subject to sales taxes is determined by law. Even if the contract does not mention taxes, they still must be paid.
Local Tax Laws Vary
The most common meeting-related areas where taxes come into play are service charges, meeting room rental, andand cancellation charges. There are no rules of thumb on the taxable nature of these fees and charges since state and local laws vary.
It can be said, however, that many states tax service charges — regardless of what they are called — if they are mandatory, rather than voluntary. Some states further stipulate that a service charge is taxable only if all or a portion is actually distributed to individuals performing the service, such as banquet servers.
Attrition, no-show, and cancellation fees are typically subject to taxation if the state's sales or occupancy tax is applicable to the occupancy of a sleeping room or the “right to occupy” such a room. A state's revenue, finance, or tax department is usually the best source to find out whether such fees are taxable.
should not state that such fees are automatically subject to state tax but rather that such fees are subject to “applicable taxes.” And planners should not pay the taxes unless the hotel can produce evidence that they do, in fact, apply to the transaction.
Another law applicable to meetings is the federal Americans with Disabilities Act, which bans discrimination in hiring and firing as well as in access to so-called “places of public accommodation,” such as hotels, shopping malls, theaters, arenas, etc. In the case of a meeting or event, both the sponsor and the venue are responsible for compliance with the law's requirements for equal access for disabled individuals.
Since some accessibility issues — such as curb cuts and Braille signs on elevators — can't be solved by planners, meeting contracts should allocate compliance responsibilities. The typical contract says the venue must comply with respect to common areas and the physical structure, and the planner is responsible for areas within his or her control, such as room set-ups, ramps for speakers to reach a raised platform, and so on.
The contract should also provide that each party will indemnify the other in the event of litigation to enforce compliance to the extent that the indemnifying party is found to be at fault.
The ADA also requires that planners provide attendees with “reasonable accommodation” that allows individuals to fully participate. That may include a sign-language interpreter or the ability to bring a guide dog into the meeting. What accommodation is reasonable will depend on the circumstances. Most registration forms now ask attendees about special needs.
The federal Copyright Act also has an impact on meetings. Any time a copyrighted song is played at an event, whether live or recorded, the organizer must pay a license fee. Since copyright law protects music and other works for approximately 95 years after first publication, there is not much music played at meetings that is exempt.
Three organizations — ASCAP, BMI, and SESAC — collect license fees on behalf of composers and recording artists. Licenses must be obtained from all three since they each handle different music; the license fees are fairly reasonable (based on attendance) but penalties for non-compliance can be severe.
James M. Goldberg is a principal in the Washington, D.C., law firm of Goldberg & Associates PLLC. His practice focuses on representing associations, corporations, and independent meeting planners. He is the author of The Meeting Planner's Legal Handbook.