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78R6957 CBH-D
By: Armbrister S.B. No. 1262
A BILL TO BE ENTITLED
AN ACT
relating to the use of certain tax incentives by municipalities for
certain economic development.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 380, Local Government Code, is amended
by adding Section 380.004 to read as follows:
Sec. 380.004. SALES AND USE TAX REBATES. (a) A
municipality or a development corporation created under the
Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas
Civil Statutes) may not offer to rebate sales and use taxes to
provide an economic incentive to persuade a person to relocate all
or part of an existing business from a different municipality in
this state.
(b) For purposes of this section, the establishment of a new
business in a municipality is considered to be a relocation of part
of an existing business if the existing business continues to
conduct business in the original municipality, the existing
business owns or operates the new business, the new business
performs services that are essential to the existing business, and:
(1) the services the new business performs for the
existing business consist primarily of purchasing taxable items
using a resale certificate and then reselling those items to the
existing business; or
(2) the municipality in which the original business is
located will lose more than 25 percent of the municipal sales and
use tax revenue generated by transactions conducted by the original
business.
SECTION 2. This Act takes effect September 1, 2003, and
applies only to an economic incentive offered on or after that date.
An economic incentive offered before that date is governed by the
law in effect when the incentive was offered, and that law is
continued in effect for that purpose.