By: Larson, Springer (Senate Sponsor - Eltife) H.B. No. 157
(In the Senate - Received from the House April 13, 2015;
May 7, 2015, read first time and referred to Committee on Finance;
May 12, 2015, reported favorably by the following vote: Yeas 8,
Nays 1, 1 present not voting; May 12, 2015, sent to printer.)
Click here to see the committee vote
A BILL TO BE ENTITLED
AN ACT
relating to the rates of sales and use taxes imposed by
municipalities; authorizing an increase or decrease in the rate of
those taxes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 334.082(d), Local Government Code, is
amended to read as follows:
(d) The tax imposed by this subchapter is in addition to a
tax imposed under other law, including Chapters 321 and 323, Tax
Code, and is included in computing a combined sales and use tax rate
for purposes of the limitation on the maximum combined sales and use
tax rate of political subdivisions.
SECTION 2. Section 334.083(a), Local Government Code, is
amended to read as follows:
(a) The rate of a tax adopted by a county under this
subchapter must be one-eighth, one-fourth, three-eighths, or
one-half of one percent. The rate of the tax adopted by a
municipality may be any rate that is an increment of one-eighth of
one percent, that the municipality determines is appropriate, and
that would not result in a combined rate that exceeds the maximum
combined rate prescribed by Section 321.101(f), Tax Code.
SECTION 3. Section 334.084, Local Government Code, is
amended to read as follows:
Sec. 334.084. RATE INCREASE. (a) A municipality [or
county] that has adopted a sales and use tax under this subchapter
at any rate, and a county that has adopted a sales and use tax under
this subchapter at a rate of less than one-half of one percent, may
by ordinance or order increase the rate of the tax if the increase
is approved by a majority of the registered voters of that
municipality or county voting at an election called and held for
that purpose.
(b) The county tax may be increased under Subsection (a) in
one or more increments of one-eighth of one percent to a maximum of
one-half of one percent. The municipal tax may be increased under
Subsection (a) in one or more increments of one-eighth of one
percent to any rate that the municipality determines is appropriate
and that would not result in a combined rate that exceeds the
maximum combined rate prescribed by Section 321.101(f), Tax Code.
(c) The ballot for an election to increase the tax shall be
printed to permit voting for or against the proposition: "The
adoption of a sales and use tax for the purpose of financing _______
(insert description of venue project) at the rate of _______ [of
one] percent (insert [one-fourth, three-eighths, or one-half, as]
appropriate rate)."
SECTION 4. Section 363.055(a), Local Government Code, is
amended to read as follows:
(a) The proposed rate for the district sales and use tax
imposed under Subchapter B, Chapter 321, Tax Code, may be any rate
that is an increment of one-eighth of one percent, that the
municipality determines is appropriate, and that would not result
in a combined rate that exceeds the maximum combined rate
prescribed by Section 321.101(f), Tax Code. The proposed rate for
the district sales and use tax imposed under [Subchapter B, Chapter
321, Tax Code, or] Subchapter B, Chapter 323, Tax Code, may be only:
(1) one-eighth of one percent;
(2) one-fourth of one percent;
(3) three-eighths of one percent; or
(4) one-half of one percent.
SECTION 5. Section 504.252(b), Local Government Code, is
amended to read as follows:
(b) The rate of the tax imposed under Subsection (a) may be
any rate that is an increment of one-eighth of one percent, that the
authorizing municipality determines is appropriate, and that would
not result in a combined rate that exceeds the maximum combined rate
prescribed by Section 504.254(a) [must be equal to one-eighth,
one-fourth, three-eighths, or one-half of one percent].
SECTION 6. Section 504.256, Local Government Code, is
amended to read as follows:
Sec. 504.256. BALLOT. In an election to adopt the sales and
use tax under this chapter, the ballot shall be printed to provide
for voting for or against the proposition: "The adoption of a
sales and use tax for the promotion and development of new and
expanded business enterprises at the rate of __________ [of one]
percent" (insert [one-eighth, one-fourth, three-eighths, or
one-half to be inserted as] appropriate rate).
SECTION 7. Section 504.258(c), Local Government Code, is
amended to read as follows:
(c) The tax rate may be reduced or increased to any rate that
is an increment of one-eighth of one percent, that the authorizing
municipality determines is appropriate, and that would not result
in a combined rate that exceeds the maximum combined rate
prescribed by Section 504.254(a)[:
[(1) reduced in one or more increments of one-eighth
of one percent, to a minimum rate of one-eighth of one percent; or
[(2) increased in one or more increments of one-eighth
of one percent, to a maximum rate of one-half of one percent].
SECTION 8. Section 504.261(b), Local Government Code, is
amended to read as follows:
(b) In an election to impose, reduce, increase, or abolish
the tax under this chapter and the additional sales and use tax, the
ballot shall be printed to provide for voting for or against the
proposition: "The adoption of a sales and use tax within the
municipality for the promotion and development of new and expanded
business enterprises at the rate of __________ [of one] percent
(insert [one-eighth, one-fourth, three-eighths, or one-half to be
inserted as] appropriate rate) and the adoption of an additional
sales and use tax within the municipality at the rate of __________
[of one] percent to be used to reduce the property tax rate" (insert
[one-eighth, one-fourth, three-eighths, or one-half to be inserted
as] appropriate rate).
SECTION 9. Section 505.252(b), Local Government Code, is
amended to read as follows:
(b) The rate of a tax adopted under this chapter may be any
rate that is an increment of one-eighth of one percent, that the
authorizing municipality determines is appropriate, and that would
not result in a combined rate that exceeds the maximum combined rate
prescribed by Section 505.256(a) [must be equal to one-eighth,
one-fourth, three-eighths, or one-half of one percent].
SECTION 10. Section 505.256(a), Local Government Code, is
amended to read as follows:
(a) Chapter 321, Tax Code, governs the imposition,
computation, administration, collection, and remittance of the
sales and use tax, except as inconsistent with this chapter. An
authorizing municipality may not adopt a rate under this chapter
that, when added to the rates of all other sales and use taxes
imposed by the authorizing municipality and other political
subdivisions of this state having territory in the authorizing
municipality, would result in a combined rate exceeding two percent
at any location in the municipality.
SECTION 11. Section 505.259, Local Government Code, is
amended to read as follows:
Sec. 505.259. ELECTION REQUIREMENT FOR CERTAIN
MUNICIPALITIES. For a tax under this subchapter at a rate that does
not exceed one-half of one percent, the [The] election requirement
under Section 505.251 is satisfied and another election is not
required if the voters of the authorizing municipality approved the
imposition of an additional one-half cent sales and use tax at an
election held before March 28, 1991, under an ordinance calling the
election that:
(1) was published in a newspaper of general
circulation in the municipality at least 14 days before the date of
the election; and
(2) expressly stated that the election was being held
in anticipation of the enactment of enabling and implementing
legislation without further elections.
SECTION 12. Section 321.101(a), Tax Code, is amended to
read as follows:
(a) A municipality may adopt or repeal a sales and use tax
authorized by this chapter, other than the additional municipal
sales and use tax, and may reduce or increase the rate of the tax, at
an election in which a majority of the qualified voters of the
municipality approve the adoption, reduction, increase, or repeal
of the tax.
SECTION 13. Section 321.102(a), Tax Code, is amended to
read as follows:
(a) A tax imposed under this chapter, a tax rate increase or
decrease adopted under this chapter, or the repeal of a tax
abolished under this chapter takes effect on the first day of the
first calendar quarter occurring after the expiration of the first
complete calendar quarter occurring after the date on which the
comptroller receives a notice of the action as required by Section
321.405(b). This subsection does not apply to the additional
municipal sales and use tax.
SECTION 14. Section 321.103, Tax Code, is amended to read as
follows:
Sec. 321.103. SALES TAX. (a) In a municipality that has
adopted the tax authorized by Section 321.101(a), there is imposed
a tax on the receipts from the sale at retail of taxable items
within the municipality at any [the] rate that is an increment of
one-eighth of one percent, that the municipality determines is
appropriate, that would not result in a combined rate that exceeds
the maximum combined rate prescribed by Section 321.101(f), and
that is approved by the voters. The tax is imposed [of one percent
and] at the same rate on the receipts from the sale at retail within
the municipality of gas and electricity for residential use.
(b) In a municipality that has adopted the additional
municipal sales and use tax, the tax is imposed at any [the] rate
that is an increment of one-eighth of one percent, that the
municipality determines is appropriate, that would not result in a
combined rate that exceeds the maximum combined rate prescribed by
Section 321.101(f), and that is approved by the voters. [The rate,
when the tax is adopted, must be equal to either one-eighth,
one-fourth, three-eighths, or one-half of one percent.] The rate
may be reduced in one or more increments of one-eighth of one
percent [to a minimum of one-eighth of one percent] or increased in
one or more increments of one-eighth of one percent [to a maximum of
one-half of one percent, or the tax may be abolished]. The rate
that the municipality adopts is on the receipts from the sale at
retail of all taxable items within the municipality and at the same
rate on the receipts from the sale at retail within the municipality
of gas and electricity for residential use unless the residential
use of gas and electricity is exempted from the tax imposed under
Section 321.101(a), in which case the residential use of gas and
electricity is exempted under this subsection also.
SECTION 15. Section 321.108(d), Tax Code, is amended to
read as follows:
(d) The rate of a tax adopted for a district under this
section may be increased to any rate that is an increment [in
increments] of one-eighth of one percent[, not to exceed a total tax
rate of one-half percent] for financing the operation of the crime
control and prevention district[,] by order of the board of
directors of the crime control and prevention district if the board
determines that the rate is appropriate, would not result in a
combined rate that exceeds the maximum combined rate prescribed by
Section 321.101(f), and is approved by a majority of the voters
voting at an election called by the board and held in the district
on the question of increasing the tax rate. At the election, the
ballot shall be printed to provide for voting for or against the
following proposition: "The increase of the ______________ Crime
Control and Prevention District sales and use tax rate to
____________ percent." If there is an increase or decrease under
this subsection in the rate of a tax imposed under this section, the
new rate takes effect on the first day of the next calendar quarter
after the expiration of one calendar quarter after the comptroller
receives notice of the increase or decrease. However, if the
comptroller notifies the president of the board of directors of the
district in writing within 10 days after receipt of the
notification that the comptroller requires more time to implement
reporting and collection procedures, the comptroller may delay
implementation of the rate change for another calendar quarter, and
the new rate takes effect on the first day of the next calendar
quarter following the elapsed quarter.
SECTION 16. Section 321.404, Tax Code, is amended by
amending Subsections (a) and (c) and adding Subsection (d) to read
as follows:
(a) In an election to adopt the tax, the ballot shall be
printed to provide for voting for or against the applicable
proposition: "A [one percent] sales and use tax is adopted within
the city at the rate of _______ percent" (insert appropriate rate)
or "The adoption of an additional sales and use tax within the city
at the rate of ________ [of one] percent to be used to reduce the
property tax rate" (insert [one-eighth, one-fourth, three-eighths,
or one-half to be inserted as] appropriate rate).
(c) In a municipality that does not impose a property tax,
the ballot at an election to adopt the additional municipal sales
and use tax shall be printed to provide for voting for or against
the following proposition: "The adoption of an additional sales
and use tax within the city at the rate of ________ [of one]
percent" (insert [one-eighth, one-fourth, three-eighths, or
one-half to be inserted as] appropriate rate).
(d) In an election to reduce or increase the tax, the ballot
shall be printed to provide for voting for or against the
proposition: "The adoption of a local sales and use tax in (name of
municipality) at the rate of ______ (insert appropriate rate)."
SECTION 17. Section 321.405(a), Tax Code, is amended to
read as follows:
(a) Within 10 days after an election in which the voters
approve of the adoption, change in rate, or abolition of a tax
authorized by this chapter, the governing body of the municipality
shall by resolution or ordinance entered in its minutes of
proceedings, declare the results of the election. A resolution or
ordinance under this section must include statements showing:
(1) the date of the election;
(2) the proposition on which the vote was held;
(3) the total number of votes cast for and against the
proposition; and
(4) the number of votes by which the proposition was
approved.
SECTION 18. Section 327.004, Tax Code, is amended to read as
follows:
Sec. 327.004. TAX RATE. The tax authorized by this chapter
may be imposed at any rate that is an increment of one-eighth of one
percent, that the municipality determines is appropriate, and that
would not result in a combined rate that exceeds the maximum
combined rate prescribed by Section 327.003(b) [the rate of
one-eighth of one percent or one-fourth of one percent].
SECTION 19. Section 327.006(b), Tax Code, is amended to
read as follows:
(b) At an election to adopt the tax, the ballot shall be
prepared to permit voting for or against the proposition: "The
adoption of a local sales and use tax in (name of municipality) at
the rate of (insert appropriate rate [one-eighth of one percent or
one-fourth of one percent]) to provide revenue for maintenance and
repair of municipal streets."
SECTION 20. Section 327.0065, Tax Code, is amended to read
as follows:
Sec. 327.0065. RATE CHANGE. (a) A municipality that has
adopted a sales and use tax under this chapter [at a rate of
one-fourth of one percent] may by ordinance decrease the rate of the
tax in increments of [to] one-eighth of one percent.
(b) A municipality that has adopted a sales and use tax
under this chapter [at a rate of one-eighth of one percent] may by
ordinance increase the rate of the tax to any rate that is an
increment of one-eighth of one percent, that the municipality
determines is appropriate, and that would not result in a combined
rate that exceeds the maximum combined rate prescribed by Section
327.003(b) [to one-fourth of one percent] if the increase is
authorized at an election held in the municipality.
(c) The ballot for an election to increase the tax shall be
printed to permit voting for or against the proposition: "The
adoption of a local sales and use tax in (name of municipality) at
the rate of (insert appropriate rate) [one-fourth of one percent]
to provide revenue for maintenance and repair of municipal
streets."
SECTION 21. The changes in law made by this Act to Sections
334.084(c), 504.256, and 504.261(b), Local Government Code, and
Sections 321.404, 327.006(b), and 327.0065(c), Tax Code, apply only
to ballot language for an election ordered on or after the effective
date of this Act. Ballot language for an election ordered before the
effective date of this Act is governed by the law in effect when the
election was ordered.
SECTION 22. This Act takes effect September 1, 2015.
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