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A BILL TO BE ENTITLED
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AN ACT
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relating to the authority of a municipality or county to impose a |
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supplemental local sales and use tax to provide additional revenue |
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for property tax relief and general governmental purposes if the |
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tax is approved by the voters; authorizing the imposition of a tax. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle C, Title 3, Tax Code, is amended by |
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adding Chapter 328 to read as follows: |
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CHAPTER 328. SUPPLEMENTAL LOCAL SALES AND USE TAX |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 328.0001. DEFINITION. In this chapter, "supplemental |
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local sales and use tax" means a sales and use tax authorized by |
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this chapter. |
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Sec. 328.0002. APPLICABILITY OF OTHER LAW. (a) Except as |
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otherwise provided by this chapter: |
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(1) Chapter 321 applies to a supplemental local sales |
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and use tax imposed by a municipality; and |
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(2) Chapter 323 applies to a supplemental local sales |
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and use tax imposed by a county. |
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(b) The following provisions do not apply to a supplemental |
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local sales and use tax: |
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(1) Sections 321.101 and 323.101; |
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(2) Subchapter E, Chapter 321, Subchapter E, Chapter |
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323, and the other provisions of Chapters 321 and 323 relating to an |
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election; |
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(3) Sections 321.506-321.508; and |
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(4) Section 323.505. |
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Sec. 328.0003. EFFECT ON COMBINED LOCAL TAX RATE. The rate |
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of a supplemental local sales and use tax may not be considered for |
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purposes of determining the combined local tax rate in any area. |
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SUBCHAPTER B. IMPOSITION OF TAX |
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Sec. 328.0051. TAX AUTHORIZED. A municipality or county may |
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adopt or abolish a supplemental local sales and use tax at an |
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election held in the municipality or county. |
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Sec. 328.0052. TAX RATE. A supplemental local sales and use |
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tax may be imposed at any rate that does not exceed one percent. |
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Sec. 328.0053. SALES AND USE TAX EFFECTIVE DATE. The |
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adoption or abolition of a supplemental local sales and use tax |
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takes effect on the next January 1 that is at least six months after |
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the date the comptroller receives notice of the results of the |
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election from the municipality or county, as applicable. |
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SUBCHAPTER C. TAX ELECTION PROCEDURES |
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Sec. 328.0101. ELECTION ORDER. The governing body of a |
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municipality or county may order an election to adopt or abolish a |
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supplemental local sales and use tax. The election order must |
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include the rate of the supplemental local sales and use tax. |
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Sec. 328.0102. ELECTION DATE. An election under this |
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chapter must be held on the next uniform election date that occurs |
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after the date of the election order and that allows sufficient time |
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to comply with the requirements of other law. |
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Sec. 328.0103. BALLOT. (a) At an election to adopt the |
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tax, the ballot shall be prepared to permit voting for or against |
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the proposition: "The adoption of a local sales and use tax in |
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(name of municipality or county) at (rate of tax) to reduce the |
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property tax rate and provide additional revenue for general |
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governmental purposes." |
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(b) At an election to abolish the tax, the ballot shall be |
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prepared to permit voting for or against the proposition: "The |
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abolition of the (rate of tax) local sales and use tax in (name of |
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municipality or county) used to reduce the property tax rate and |
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provide additional revenue for general governmental purposes." |
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SUBCHAPTER D. USE OF TAX REVENUE |
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Sec. 328.0151. USE OF REVENUE. Revenue from a supplemental |
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local sales and use tax shall be allocated as follows: |
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(1) 50 percent is additional sales and use tax revenue |
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of the municipality or county imposing the tax for purposes of |
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Section 26.041; and |
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(2) the remainder is for the use and benefit of the |
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municipality or county imposing the tax and may be used for any |
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purpose for which the general funds of the municipality or county |
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may be used. |
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SECTION 2. Section 26.012(1), Tax Code, is amended to read |
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as follows: |
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(1) "Additional sales and use tax" means an additional |
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sales and use tax imposed by: |
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(A) a municipality [city] under Section |
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321.101(b) or Chapter 328; |
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(B) a county under Chapter 323 or 328; or |
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(C) a hospital district, other than a hospital |
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district: |
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(i) created on or after September 1, 2001, |
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that: |
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(a) imposes the sales and use tax |
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under Subchapter I, Chapter 286, Health and Safety Code; or |
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(b) imposes the sales and use tax |
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under Subchapter L, Chapter 285, Health and Safety Code; or |
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(ii) that imposes the sales and use tax |
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under Subchapter G, Chapter 1061, Special District Local Laws Code. |
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SECTION 3. Section 31.01(i), Tax Code, is amended to read as |
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follows: |
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(i) For a municipality [city or town] that imposes an |
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additional sales and use tax under Section 321.101(b) or Chapter |
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328 [of this code], or a county that imposes a sales and use tax |
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under Chapter 323 or 328 [of this code], the tax bill shall indicate |
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the amount of additional ad valorem taxes, if any, that would have |
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been imposed on the property if additional ad valorem taxes had been |
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imposed in an amount equal to the amount of revenue estimated to be |
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collected from the additional municipal [city] sales and use tax or |
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from the county sales and use tax, as applicable, for the year |
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determined as provided by Section 26.041 [of this code]. |
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SECTION 4. Sections 26.012(1) and 31.01(i), Tax Code, as |
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amended by this Act, apply only to ad valorem taxes that are imposed |
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for an ad valorem tax year that begins on or after January 1, 2026. |
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SECTION 5. (a) Except as provided by Subsection (b) of this |
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section, this Act takes effect on the 91st day after the last day of |
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the legislative session. |
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(b) Sections 26.012(1) and 31.01(i), Tax Code, as amended by |
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this Act, take effect January 1, 2026. |