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A BILL TO BE ENTITLED
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AN ACT
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relating to limitations applicable to certain agreements providing |
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for a rebate of municipal sales and use taxes or a grant or loan |
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based on those taxes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 321, Tax Code, is amended |
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by adding Section 321.006 to read as follows: |
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Sec. 321.006. LIMITATIONS ON CERTAIN SALES TAX INCENTIVES. |
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(a) In this section, "affiliated group" has the meaning assigned by |
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Section 171.0001. |
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(b) This section applies to one or more agreements: |
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(1) the parties to which include: |
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(A) a municipality or a local government |
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corporation or other entity created by the municipality; and |
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(B) a retailer or an entity that is a member of |
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the same affiliated group as a retailer; |
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(2) the terms of which include: |
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(A) the relocation of an existing place of |
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business of the retailer described by Subdivision (1)(B) or a |
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retailer that is a member of the same affiliated group as the |
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retailer or entity described by Subdivision (1)(B) to the |
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municipality described by Subdivision (1)(A) from one or more other |
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municipalities in this state; or |
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(B) the establishment in the municipality |
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described by Subdivision (1)(A) of a new place of business of the |
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retailer described by Subdivision (1)(B) or a retailer that is a |
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member of the same affiliated group as the retailer or entity |
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described by Subdivision (1)(B); |
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(3) that have the effect of sales tax being payable to |
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the municipality described by Subdivision (1)(A) instead of one or |
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more other municipalities in this state; and |
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(4) under which the municipality, corporation, or |
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other entity described by Subdivision (1)(A) agrees to: |
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(A) rebate to the retailer or entity described by |
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Subdivision (1)(B), a member of the retailer or entity's affiliated |
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group, or another party designated by the retailer or entity an |
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amount of tax imposed by the municipality under this chapter or an |
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amount of revenue derived from that tax; or |
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(B) provide a grant or loan to the retailer or |
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entity described by Subdivision (1)(B), a member of the retailer or |
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entity's affiliated group, or another party designated by the |
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retailer or entity in an amount that is based on an amount of tax |
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imposed by the municipality under this chapter or based on an amount |
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of revenue derived from that tax. |
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(c) Notwithstanding any other law, a municipality or a local |
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government corporation or other entity created by the municipality |
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may not enter into an agreement to which this section applies with a |
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retailer, a member of the retailer's affiliated group, or another |
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party designated by the retailer that results in the relocation or |
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establishment of a place of business as described by Subsection |
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(b)(2)(A) or (B) unless: |
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(1) the agreement changes the economic position, other |
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than through a tax benefit, of the retailer, a member of the |
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retailer's affiliated group, or another party designated by the |
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retailer; and |
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(2) the retailer, member of the retailer's affiliated |
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group, or another party designated by the retailer has a |
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substantial purpose, other than a tax benefit, for entering into |
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the agreement. |
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(d) If the comptroller determines that a municipality, |
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local government corporation, or other entity has violated |
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Subsection (c), the comptroller shall, with respect to the |
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retailer, disregard the place of business described by Subsection |
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(b)(2)(A) or (B) when determining where the sale of taxable items is |
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consummated under Section 321.203 and revoke any sales tax permit |
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issued for the location. |
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SECTION 2. This Act takes effect September 1, 2025. |