85S10703 CJC-D
By: Krause H.B. No. 301
A BILL TO BE ENTITLED
AN ACT
relating to the substitution of a local sales and use tax for
property taxes imposed by certain local governments; authorizing
the imposition of a tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 3, Tax Code, is amended by
adding Chapter 328 to read as follows:
CHAPTER 328. SUPPLEMENTAL LOCAL SALES AND USE TAX
Sec. 328.001. DEFINITIONS. In this chapter:
(1) "Lost property tax revenue" means the estimated
amount of property tax revenue to be received by a qualifying local
government for the tax year in which that government adopts an
ordinance or order described by Subdivision (2)(A), multiplied by
1.08.
(2) "Qualifying local government" means a
municipality or county that:
(A) before June 30 of a year:
(i) adopts an ordinance or order providing
that, beginning January 1 of the following year, the local
government will not impose a property tax and instead elects to
impose a supplemental sales and use tax; and
(ii) forwards a certified copy of the
ordinance or order described by Subparagraph (i) to the
comptroller; or
(B) in a preceding year, adopted and forwarded to
the comptroller an ordinance or order described by Paragraph (A)
but has not subsequently adopted an ordinance or order abolishing
the supplemental sales and use tax imposed by the government.
(3) "Supplemental sales and use tax" means a sales and
use tax authorized by this chapter.
Sec. 328.002. APPLICABILITY OF OTHER LAW. (a) Except as
otherwise provided by this chapter:
(1) Chapter 321 applies to a supplemental sales and
use tax imposed by a municipality; and
(2) Chapter 323 applies to a supplemental sales and
use tax imposed by a county.
(b) The following provisions do not apply to a supplemental
sales and use tax:
(1) Sections 321.101 and 323.101;
(2) Subchapter E, Chapter 321, Subchapter E, Chapter
323, and the other provisions of Chapters 321 and 323 relating to an
election;
(3) Sections 321.506-321.508; and
(4) Section 323.505.
(c) A supplemental sales and use tax is not an additional
sales and use tax for purposes of Section 321.101 or any other law.
Sec. 328.003. TAX AUTHORIZED. (a) A qualifying local
government by adoption of an ordinance or order may adopt,
increase, reduce, or abolish the supplemental sales and use tax.
The tax is in addition to any other sales and use tax authorized by
law, but may only be imposed during a period during which the
qualifying local government does not impose a property tax.
(b) A qualifying local government is not required to call an
election to adopt, increase, reduce, or abolish the supplemental
sales and use tax.
Sec. 328.004. TAX RATE; INCREASE, REDUCTION, OR ABOLITION
OF TAX. (a) In the first year in which a qualifying local
government imposes the supplemental sales and use tax, the rate of
the tax is equal to a rate that, when applied to the estimated
cumulative sales price of the sale, use, storage, or other
consumption of taxable items within the local government during
that year, would produce an amount equal to the local government's
lost property tax revenue. The ordinance or order authorizing the
tax and adopted under Section 328.003 must specify the tax rate.
(b) A qualifying local government that imposes the
supplemental sales and use tax may by adoption of an ordinance or
order annually increase or reduce the rate of the tax in increments
of one-eighth of one percent. A reduction in the rate of the tax may
not impair any outstanding debt or other obligation payable from
the tax.
(c) A qualifying local government that imposes the
supplemental sales and use tax may by adoption of an ordinance or
order abolish the tax if there is no outstanding debt secured by the
tax.
(d) A certified copy of an ordinance or order described by
this section must be forwarded to the comptroller before June 30 of
the year preceding the January 1 on which the action approved in the
ordinance or order is to take effect.
Sec. 328.005. SALES AND USE TAX EFFECTIVE DATE. The
adoption, increase, reduction, or abolition of the supplemental
sales and use tax takes effect on the next January 1 that is at least
six months after the date the qualifying local government forwards
to the comptroller the copy of the ordinance or order adopting,
increasing, reducing, or abolishing the tax, as applicable.
Sec. 328.006. EFFECT ON COMBINED LOCAL TAX RATE. The rate
of a supplemental sales and use tax may not be considered for
purposes of determining the combined local tax rate in any area.
Sec. 328.007. USE OF TAX REVENUE. Revenue from a
supplemental sales and use tax is for the use and benefit of the
qualifying local government imposing the tax and may be used for any
purpose for which the general funds of that government may be used.
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect December 1, 2017.