TAX CODE
SUBTITLE C. LOCAL SALES AND USE TAXES
CHAPTER 321. MUNICIPAL SALES AND USE TAX ACT
SUBCHAPTER A. GENERAL PROVISIONS
§ 321.001. SHORT TITLE. This chapter may be cited as
the Municipal Sales and Use Tax Act.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.002. DEFINITIONS. (a) In this chapter:
(1) "Additional municipal sales and use tax" means
only the additional tax authorized by Section 321.101(b).
(2) "Municipality" includes any incorporated city,
town, or village.
(3) "Place of business of the retailer" means an
established outlet, office, or location operated by the retailer or
the retailer's agent or employee for the purpose of receiving
orders for taxable items and includes any location at which three or
more orders are received by the retailer during a calendar year. A
warehouse, storage yard, or manufacturing plant is not a "place of
business of the retailer" unless at least three orders are received
by the retailer during the calendar year at the warehouse, storage
yard, or manufacturing plant. An outlet, office, facility, or
location that contracts with a retail or commercial business
engaged in activities to which this chapter applies to process for
that business invoices or bills of lading onto which sales tax is
added is not a "place of business of the retailer" if the
comptroller determines that the outlet, office, facility, or
location functions or exists to avoid the tax imposed by this
chapter or to rebate a portion of the tax imposed by this chapter to
the contracting business.
(b) Words used in this chapter and defined by Chapter 151
have the meanings assigned by Chapter 151.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 2003, 78th Leg., ch. 1155, § 1, eff. Sept. 1,
2003.
§ 321.003. OTHER PORTIONS OF TAX APPLICABLE. Subtitles
A and B, Title 2, and Chapters 142 and 151 apply to the taxes and to
the administration and enforcement of the taxes imposed by this
chapter in the same manner that those laws apply to state taxes,
unless modified by this chapter.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 2, § 14.13, eff. Aug. 28,
1989; Acts 2003, 78th Leg., ch. 1310, § 114, eff. Oct. 1, 2003.
§ 321.004. REFERENCES TO SALES OR USE TAX. A reference
to a sales tax or a use tax imposed or authorized by this chapter is
a reference to both the taxes imposed under Sections 321.101(a) and
(b) unless otherwise provided.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
SUBCHAPTER B. IMPOSITION OF SALES AND USE TAXES BY MUNICIPALITIES
§ 321.101. TAX AUTHORIZED. (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, at an
election in which a majority of the qualified voters of the
municipality approve the adoption or repeal of the tax.
(b) A municipality that is not disqualified may, by a
majority vote of the qualified voters of the municipality voting at
an election held for that purpose, adopt an additional sales and use
tax for the benefit of the municipality in accordance with this
chapter. A municipality is disqualified from adopting the
additional sales and use tax if the municipality:
(1) is included within the boundaries of a rapid
transit authority created under Chapter 451, Transportation Code;
(2) is included within the boundaries of a regional
transportation authority created under Chapter 452, Transportation
Code, by a principal municipality having a population of less than
800,000, unless the municipality has a population of 400,000 or
more and is located in more than one county;
(3) is wholly or partly located in a county that
contains territory within the boundaries of a regional
transportation authority created under Chapter 452, Transportation
Code, by a principal municipality having a population in excess of
800,000, unless:
(A) the municipality is a contiguous
municipality; or
(B) the municipality is not included within the
boundaries of the authority and is located wholly or partly in a
county in which fewer than 250 persons are residents of both the
county and the authority according to the most recent federal
census; or
(C) the municipality is not and on January 1,
1993, was not included within the boundaries of the authority; or
(4) imposes a tax authorized by Chapter 453,
Transportation Code.
(c) For the purposes of Subsection (b), "principal
municipality " and "contiguous municipality " have the meanings
assigned by Section 452.001, Transportation Code.
(d) In any municipality in which an additional sales and use
tax has been imposed, in the same manner and by the same procedure
the municipality by majority vote of the qualified voters of the
municipality voting at an election held for that purpose may
reduce, increase, or abolish the additional sales and use tax.
(e) An authority created under Chapter 451 or 452,
Transportation Code, is prohibited from imposing the tax provided
for by those chapters if within the boundaries of the authority
there is a municipality that has adopted the additional sales and
use tax provided for by this section.
(f) A municipality may not adopt or increase a sales and use
tax or an additional sales and use tax under this section if as a
result of the adoption or increase of the tax the combined rate of
all sales and use taxes imposed by the municipality and other
political subdivisions of this state having territory in the
municipality would exceed two percent at any location in the
municipality.
(g) For the purposes of Subsection (f), "territory" in a
municipality having a population of 5,000 or less and bordering on
the Gulf of Mexico does not include any area covered by water and in
which no person has a place of business to which a sales tax permit
issued under Subchapter F of Chapter 151 applies.
(h) Expired.
(i) A municipality for which the adoption or increase of a
sales and use tax approved by the voters in an election held after
May 1, 1995, and before December 31, 1995, is invalid because the
election combined into a single proposition proposal for adopting
an economic development sales and use tax under Section 4B,
Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas
Civil Statutes), and an additional sales and use tax under
Subsection (b) may adopt or increase the sales and use tax
previously approved by the voters by ordinance or resolution of the
governing body of the municipality. If the governing body of the
municipality adopts or increases the sales and use tax under this
subsection, the municipal secretary shall send to the comptroller
by certified or registered mail a certified copy of the ordinance or
resolution. The tax takes effect on the first day of the month
following the expiration of the calendar quarter occurring after
the date on which the comptroller receives the ordinance or
resolution.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 54, § 1, eff. Oct.
20, 1987; Acts 1989, 71st Leg., ch. 2, § 14.14(a), eff. Aug. 28,
1989; Acts 1989, 71st Leg., ch. 489, § 1, eff. Aug. 28, 1989;
Acts 1991, 72nd Leg., ch. 184, § 2, eff. May 24, 1991; Acts 1991,
72nd Leg., ch. 223, § 1, eff. May 29, 1991; Acts 1993, 73rd Leg.,
ch. 320, § 1, eff. May 28, 1993; Acts 1993, 73rd Leg., ch. 1031,
§ 25, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 65, § 1,
eff. May 9, 1997; Acts 1997, 75th Leg., ch. 165, § 30.264, eff.
Sept. 1, 1997; Acts 1997, 75th Leg., ch. 705, § 1, eff. Sept. 1,
1997.
§ 321.102. EFFECTIVE DATES: NEW TAX, TAX REPEAL,
BOUNDARY CHANGE. (a) A tax imposed 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.
(b) The additional municipal sales and use tax takes effect
or is increased, reduced, or repealed in the municipality on the
October 1st after the expiration of the first complete calendar
quarter after the date on which the comptroller receives notice
from the municipality of the adoption, increase, reduction, or
repeal of the additional municipal sales and use tax.
(c) If a municipality in which the tax imposed under this
chapter is in effect changes its boundaries, the municipal
secretary shall send by United States registered or certified mail
to the comptroller a certified copy of the ordinance that adds or
detaches municipal territory and that shows the effective date of
the boundary change. The ordinance must be accompanied by a map
clearly showing the added or detached territory. Except as
provided by Subsection (d), the tax takes effect in the added
territory or is inapplicable to the detached territory on the first
day of the first calendar quarter after the comptroller receives
the ordinance and map.
(d) If, within 10 days after the receipt of an ordinance and
map sent under Subsection (c), the comptroller notifies the
secretary of the municipality that more time is required, the
effective date of the application of the tax in the added or
detached area is the first day of the first calendar quarter after
the expiration of the first complete calendar quarter occurring
after the date on which the comptroller receives the ordinance and
map.
(e) If as a result of the imposition or increase in a sales
and use tax by a municipality in which there is located all or part
of a local governmental entity that has adopted a sales and use tax
or as a result of the annexation by a municipality of all or part of
the territory in a local governmental entity that has adopted a
sales and use tax the overlapping local sales and use taxes in the
area will exceed two percent, the entity's sales and use tax is
automatically reduced in that area to a rate that when added to the
combined rate of local sales and use taxes will equal two percent.
(f) If an entity's rate is reduced in accordance with
Subsection (e), the comptroller shall withhold from the
municipality's monthly sales and use tax allocation an amount equal
to the amount that would have been collected by the entity had the
municipality not imposed or increased its sales and use tax or
annexed the area in the entity less amounts that the entity collects
following the municipality's levy of or increase in its sales and
use tax or annexation of the area in the entity. The comptroller
shall withhold and pay the amount withheld to the entity under
policies or procedures that the comptroller considers reasonable.
(g) Subsections (e) and (f) do not apply if and during any
period in which a local governmental entity has outstanding
indebtedness or obligations that are payable wholly or partly from
the sales and use tax revenue of the entity. A municipality may not
implement the imposition or increase of the sales and use tax as a
result of the circumstances described by Subsection (e) if, as a
result of the implementation of that imposition or increase, the
combined rate of all sales and use taxes imposed by the
municipality, the local governmental entity, and any other
political subdivisions having territory in the district would
exceed two percent at any location in the municipality.
(h) A transit authority is not a local governmental entity
for the purposes of Subsections (e) and (f).
(i) Subsection (g) does not apply to a local governmental
entity or political subdivision created under Chapter 326, Local
Government Code.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 256, § 1, eff. Sept. 1,
1989; Acts 1991, 72nd Leg., ch. 184, § 3, eff. May 24, 1991;
Acts 1999, 76th Leg., ch. 1467, § 2.67, eff. June 19, 1999; Acts
2001, 77th Leg., ch. 1263, § 74, eff. Sept. 1, 2001.
§ 321.1025. ANNEXATION TO CERTAIN REGIONAL
TRANSPORTATION AUTHORITIES. (a) A municipality that is wholly or
partly located in a county that contains territory within the
boundaries of a regional transportation authority created under
Chapter 452, Transportation Code, by a principal municipality
having a population of more than 800,000 and that has adopted an
additional sales and use tax for the benefit of the municipality may
hold an election on the question of whether the municipality shall
be annexed to the authority.
(b) The election must be held in the manner required by
Chapter 452, Transportation Code.
(c) If the annexation is approved by the voters, the
election is to be treated for all purposes as an election to abolish
the additional sales and use tax in the municipality and the tax is
repealed in the manner provided by this chapter.
Added by Acts 1991, 72nd Leg., ch. 223, § 2, eff. May 29, 1991.
Amended by Acts 1997, 75th Leg., ch. 165, § 30.265, eff. Sept. 1,
1997.
§ 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 the rate 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 the rate 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.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1991, 72nd Leg., ch. 184, § 4, eff. May 24, 1991.
§ 321.104. USE TAX. (a) In a municipality that has
adopted the tax authorized by this chapter, there is imposed an
excise tax on the use, storage, or other consumption within the
municipality of taxable items purchased, leased, or rented from a
retailer during the period that the tax is effective within the
municipality. The rate of the excise tax is the same as the rate of
the sales tax portion of the tax and is applied to the sales price of
the taxable items.
(b) In a municipality that has adopted the tax authorized by
this chapter, there is imposed an excise tax on the use, storage, or
other consumption of gas or electricity for residential purposes
and purchased from any retailer during the period that the tax is
effective within the municipality. The tax is imposed at the same
rate as the tax provided by Subsection (a).
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1991, 72nd Leg., ch. 705, § 25, eff. Sept. 1,
1991.
§ 321.105. RESIDENTIAL USE OF GAS AND
ELECTRICITY. (a) There are exempted from the taxes imposed by a
municipality under this chapter the sale, production,
distribution, lease, or rental of, and the use, storage, or other
consumption within the municipality of gas and electricity for
residential use in any municipality that:
(1) adopted the tax on or after October 1, 1979; or
(2) adopted the tax before that time but:
(A) failed to exempt the residential use of gas
and electricity before May 1, 1979; and
(B) has not reimposed the tax as provided by
Subsection (c).
(b) A governing body of a municipality that adopted the
taxes under this chapter before October 1, 1979, may, by ordinance
adopted by a vote of a majority of the membership of the governing
body and recorded in the municipal minutes, exempt from the taxes
authorized by this chapter the receipts from the sale, production,
distribution, lease, or rental of, and the use, storage, or other
consumption of gas and electricity for residential use.
(c) A governing body of a municipality that has adopted the
taxes authorized by this chapter before May 1, 1979, and in which
residential use of gas and electricity is exempted within the
municipality, may reimpose the taxes on gas and electricity for
residential use by ordinance adopted by a vote of the majority of
the membership of the governing body and entered in the municipal
minutes.
(d) The municipal secretary shall send to the comptroller by
United States certified or registered mail a copy of an ordinance
exempting or imposing the taxes on residential use of gas and
electricity.
(e) The exemption or reimposition of taxes on residential
use of gas and electricity takes effect within the municipality as
provided by Section 321.104(a) after receipt of a copy of the
ordinance.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.106. FIRE CONTROL DISTRICT TAX. (a) Subject to
an election held in accordance with Chapter 344, Local Government
Code, a municipality in which a fire control, prevention, and
emergency medical services district is established shall adopt a
sales and use tax in the area of the district for the purpose of
financing the operation of the fire control, prevention, and
emergency medical services district. The revenue from the tax may
be used only for the purpose of financing the operation of the fire
control, prevention, and emergency medical services district. The
proposition for adopting a tax under this section and the
proposition for creation of a fire control, prevention, and
emergency medical services district shall be submitted at the same
election. For purposes of Section 321.101, a tax under this section
is not an additional sales and use tax.
(b) A tax adopted for a district under this section for
financing the operation of the district may be decreased in
increments of one-eighth of one percent by order of the board of
directors of the district.
(c) The rate of a tax adopted for a district under this
section may be increased 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 fire control, prevention, and
emergency medical services district by order of the board of
directors of the fire control, prevention, and emergency medical
services district if approved by a majority of the qualified 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
proposition: "The increase of the __________ (name of the
municipality that created the district) Fire Control, Prevention,
and Emergency Medical Services District sales and use tax rate to
______ percent." If there is an increase or decrease under this
section 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 one calendar quarter, and the
new rate takes effect on the first day of the calendar quarter that
follows the elapsed quarter.
(d) The comptroller shall remit to the municipality amounts
collected at the rate imposed under this section as part of the
regular allocation of other municipal tax revenue collected by the
comptroller. The municipality shall remit that amount to the
district. A retailer may not be required to use allocation and
reporting procedures in the collection of taxes under this section
that are different from the procedures that retailers use in the
collection of other sales and use taxes under this chapter. An
item, transaction, or service that is taxable in a municipality
under a sales or use tax authorized by another section of this
chapter is taxable under this section. An item, transaction, or
service that is not taxable in a municipality under a sales or use
tax authorized by another section of this chapter is not taxable
under this section.
(e) If, in a municipality where a fire control, prevention,
and emergency medical services district is composed of the whole
municipality, a municipal sales and use tax or a municipal sales and
use tax rate increase for the purpose of financing a fire control,
prevention, and emergency medical services district is approved,
the municipality is responsible for distributing to the district
that portion of the municipal sales and use tax revenue received
from the comptroller that is to be used for the purposes of
financing the fire control, prevention, and emergency medical
services district. Not later than the 10th day after the date the
municipality receives money under this section from the
comptroller, the municipality shall make the distribution in the
proportion that the fire control, prevention, and emergency medical
services portion of the tax rate bears to the total sales and use
tax rate of the municipality. The amounts distributed to a fire
control, prevention, and emergency medical services district are
not considered to be sales and use tax revenue for the purpose of
property tax reduction and computation of the municipal tax rate
under Section 26.041.
(f) For purposes of the tax imposed under this section, a
reference in this chapter to the municipality as the territory in
which the tax or an incident of the tax applies means only the
territory located in the fire control, prevention, and emergency
medical services district, if that district is composed of an area
less than an entire municipality.
(g) The comptroller may adopt rules and the municipality's
governing body may adopt orders to administer this section.
Added by Acts 2001, 77th Leg., ch. 1295, § 2, eff. June 1, 2001.
§ 321.107. ADMINISTRATION OF LOCAL SALES AND USE TAXES
IMPOSED BY OTHER GOVERNMENTAL ENTITIES. The imposition,
computation, administration, enforcement, and collection of any
local sales and use tax imposed by any other local governmental
entity is governed by this chapter, except as otherwise provided by
law. In this section, "other local governmental entity" includes
any governmental entity created by the legislature that has a
limited purpose or function, that has a defined or restricted
geographic territory, and that is authorized by law to impose a
local sales and use tax. The term does not include a county, county
health services district, county landfill and criminal detention
center district, metropolitan transportation authority, economic
development district, crime control district, hospital district,
emergency services district, or library district.
Added by Acts 2003, 78th Leg., ch. 209, § 54, eff. Oct. 1, 2003.
SUBCHAPTER C. COMPUTATION OF TAXES
§ 321.201. COMPUTATION OF SALES TAXES. (a) Each
retailer in a municipality that has adopted a tax authorized by this
chapter shall add each sales tax imposed by the municipality under
this chapter and by Chapter 151 to the sales price, and the sum of
the taxes is a part of the price, a debt of the purchaser to the
retailer until paid, and recoverable at law in the same manner as
the purchase price. If the municipality imposes the tax on gas and
electricity for residential use, only the municipal tax is added to
the sales price of sales of gas and electricity for residential use.
(b) The amount of the total tax is computed by multiplying
the combined applicable tax rates, or the rate of the municipal tax
only for sales of gas and electricity for residential use in a
municipality that imposes the tax on gas and electricity for
residential use, by the amount of the sales price. If the product
results in a fraction of a cent less than one-half of one cent, the
fraction of a cent is not collected. If the fraction of a cent is
one-half of one cent or more, the fraction shall be collected as one
cent.
(c) The comptroller may publish schedules and brackets of
amounts of taxes based on the formula provided by Subsection (b) for
use in municipalities that have adopted the taxes authorized by
this chapter.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.202. METHOD OF REPORTING: RETAILERS HAVING SALES
BELOW TAXABLE AMOUNT. The exclusion provided by Section 151.411
applies to a retailer under this chapter 50 percent of whose
receipts from the sales of taxable items comes from individual
transactions in which the sales price is an amount on which no tax
is produced from the combined state and local taxes.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.203. CONSUMMATION OF SALE. (a) A sale of a
taxable item occurs within the municipality in which the sale is
consummated. A sale is consummated as provided by this section
regardless of the place where transfer of title or possession
occurs.
Text of subsec. (b) effective until July 1, 2004
(b) If a retailer has only one place of business in this
state, all of the retailer's retail sales are consummated at that
place of business except as provided by Subsection (e).
Text of subsec. (b) effective July 1, 2004
(b) If a retailer has only one place of business in this
state, all of the retailer's retail sales of tangible personal
property are consummated at that place of business except as
provided by Subsection (e).
Text of subsec. (c) effective until July 1, 2004
(c) If a retailer has more than one place of business in this
state, a sale of a taxable item by the retailer is consummated at
the retailer's place of business:
(1) from which the retailer ships or delivers the
item, if the retailer ships or delivers the item to a point
designated by the purchaser or lessee; or
(2) where the purchaser or lessee takes possession of
and removes the item, if the purchaser or lessee takes possession of
and removes the item from a place of business of the retailer.
Text of subsec. (c) effective July 1, 2004
(c) If a retailer has more than one place of business in this
state, a sale of tangible personal property by the retailer is
consummated at the retailer's place of business:
(1) from which the retailer ships or delivers the
property, if the retailer ships or delivers the property to a point
designated by the purchaser or lessee; or
(2) where the purchaser or lessee takes possession of
and removes the property, if the purchaser or lessee takes
possession of and removes the property from a place of business of
the retailer.
Text of subsec. (d) effective until July 1, 2004
(d) If neither the possession of a taxable item is taken at
nor shipment or delivery of the item is made from the retailer's
place of business in this state, the sale is consummated at:
(1) the retailer's place of business in this state
where the order is received; or
(2) if the order is not received at a place of business
of the retailer, the place of business from which the retailer's
salesman who took the order operates.
Text of subsec. (d) effective July 1, 2004
(d) If neither the possession of tangible personal property
is taken at nor shipment or delivery of the property is made from
the retailer's place of business in this state, the sale is
consummated at:
(1) the retailer's place of business in this state
where the order is received; or
(2) if the order is not received at a place of business
of the retailer, the place of business from which the retailer's
salesman who took the order operates.
Text of subsec. (e) effective until July 1, 2004
(e) A sale is consummated at the location in this state to
which a taxable item is shipped or delivered or at which possession
is taken by the customer if transfer of possession of a taxable item
occurs at, or shipment or delivery of the item originates from, a
location in this state other than a place of business of the
retailer and if:
(1) the retailer is an itinerant vendor who has no
place of business;
(2) the retailer's place of business where the
purchase order is initially received or from which the retailer's
salesman who took the order operates is outside this state; or
(3) the purchaser places the order directly with the
retailer's supplier and the item is shipped or delivered directly
to the purchaser by the supplier.
Text of subsec. (e) effective July 1, 2004
(e) A sale of tangible personal property is consummated at
the location in this state to which the property is shipped or
delivered or at which possession is taken by the customer if
transfer of possession of the property occurs at, or shipment or
delivery of the property originates from, a location in this state
other than a place of business of the retailer and if:
(1) the retailer is an itinerant vendor who has no
place of business;
(2) the retailer's place of business where the
purchase order is initially received or from which the retailer's
salesman who took the order operates is outside this state; or
(3) the purchaser places the order directly with the
retailer's supplier and the property is shipped or delivered
directly to the purchaser by the supplier.
(f) The sale of natural gas and electricity is consummated
at the point of delivery to the consumer.
Text of subsec. (g) effective until July 1, 2004
(g) The sale of telecommunications services is consummated
at the location of the telephone or other telecommunications device
from which the call or other transmission originates, unless the
point of origin cannot be determined, in which case the sale is at
the address to which the call is billed. However, the sale of
mobile telecommunications services is consummated in accordance
with the provisions of Section 151.061.
Text of subsec. (g) effective July 1, 2004
(g) The sale of mobile telecommunications services is
consummated in accordance with Section 151.061.
Text of subsec. (g-1) effective July 1, 2004
(g-1) The sale of telecommunications services sold based on
a price that is measured by individual calls is consummated at the
location where the call originates and terminates or the location
where the call either originates or terminates and at which the
service address is also located.
Text of subsec. (g-2) effective July 1, 2004
(g-2) Except as provided by Subsection (g-3), the sale of
telecommunications services sold on a basis other than on a
call-by-call basis is consummated at the location of the customer's
place of primary use.
Text of subsec. (g-3) effective July 1, 2004
(g-3) A sale of post-paid calling services is consummated at
the location of the origination point of the telecommunications
signal as first identified by the seller's telecommunications
system or by information received by the seller from the seller's
service provider if the system used to transport the signal is not
that of the seller.
(h) The sale of an amusement service is consummated in the
municipality in which the performance or other delivery of the
service takes place.
(i) If a purchaser who has given a resale certificate makes
any use of a taxable item that subjects the taxable item to the
sales tax under the provisions of Section 151.154, the use or other
consumption of the taxable item that subjected the taxable item to
the tax is consummated at the place where the taxable item is stored
or kept at the time of or just before the use or consumption.
(j) The sale of services delivered through a cable system is
consummated at the point of delivery to the consumer.
(k) The sale of garbage or other solid waste collection or
removal service is consummated at the location at which the garbage
or other solid waste is located when its collection or removal
begins.
Text of subsec. (l) as added by Acts 2003, 78th Leg., ch. 1310, §
115 and effective July 1, 2004
(l) Except as otherwise provided by this section, the sale
of a taxable service, other than a service described by Section
151.330(f), is consummated at the location at which the service is
performed or otherwise delivered.
Text of subsec. (l) added by Acts 2003, ch. 1155, § 2
(l) If there is no place of business of the retailer because
the comptroller determines that an outlet, office, facility, or
location contracts with a retail or commercial business to process
for that business invoices or bills of lading and that the outlet,
office, facility, or location functions or exists to avoid the tax
imposed by this chapter or to rebate a portion of the tax imposed by
this chapter to the contracting business, a sale is consummated at
the place of business of the retailer from whom the outlet, office,
facility, or location purchased the taxable item for resale to the
contracting business.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 2, § 14.22(a), eff. Aug. 28,
1989; Acts 1989, 71st Leg., ch. 810, § 1, eff. Oct. 1, 1989;
Acts 1991, 72nd Leg., ch. 705, § 26, eff. Sept. 1, 1991; Acts
2001, 77th Leg., ch. 370, § 2, eff. Aug. 1, 2002; Acts 2003, 78th
Leg., ch. 209, § 55, eff. Oct. 1, 2003; Acts 2003, 78th Leg., ch.
1155, § 2, 3, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1310,
§ 115, eff. July 1, 2004.
§ 321.204. COMPUTATION OF USE TAX. (a) In each
municipality that has adopted the taxes authorized by this chapter,
the taxes imposed by Section 321.104(a) and the tax imposed by
Subchapter D, Chapter 151, are added together to form a single
combined tax rate, except:
(1) in a municipality that imposes the tax on gas and
electricity for residential use only the rate of the municipal tax
is used to determine the amount of tax on the use, storage, or other
consumption of gas and electricity for residential use; and
(2) only the rate of the municipal tax is used in a
situation described by Section 321.205(b).
(b) The formula prescribed by Section 321.201(b) applies to
the computation of the amount of use taxes under this chapter.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.205. USE TAX: MUNICIPALITY IN WHICH USE
OCCURS. (a) In determining the incidence of the use tax
authorized by this chapter the name of the municipality adopting
the tax is substituted in Subchapter D, Chapter 151, for "this
state" where those words are used to designate the taxing entity or
delimit the tax imposed. However, the excise tax authorized by this
chapter on the use, storage, or consumption of a taxable item does
not apply if the item is first used, stored, or consumed in a
municipality or area that has not adopted the taxes authorized by
this chapter.
(b) If a sale of a taxable item is consummated in this state
but not within a municipality that has adopted the taxes authorized
by this chapter and the item is shipped directly, or brought by the
purchaser or lessee directly, into a municipality that has adopted
the taxes authorized by this chapter, the item is subject to the
municipality's use tax. The use is considered to be consummated at
the location where the item is first stored, used, or consumed after
the intrastate transit has ceased.
(c) If a taxable item is shipped from outside this state to a
customer within this state and the use of the item is consummated
within a municipality that has adopted the tax authorized by this
chapter, the item is subject to the municipality's use tax and not
its sales tax. A use is considered to be consummated at the first
point in this state where the item is stored, used, or consumed
after the interstate transit has ceased. A taxable item delivered
to a point in this state is presumed to be for storage, use, or
consumption at that point until the contrary is established.
(d) The holder of a direct payment permit issued under
Chapter 151 who becomes liable for the use tax under this chapter by
reason of the storage, use, or consumption of a taxable item
purchased in this state under a direct payment exemption
certificate shall allocate the tax to the municipality in which the
item was first removed from the permit holder's storage, or if not
stored, the place at which the item was first used or consumed by
the permit holder after transportation. In this subsection an item
is not considered to have been stored, used, or consumed because of
a temporary delay or interruption necessary and incidental to its
transportation or further fabrication, processing, or assembling
within this state for delivery to the permit holder. A charge for
fabrication, processing, or further assembly in a municipality that
has adopted the tax under this chapter shall be subject to the
municipal use tax.
(e) With respect to a taxable service, "use" means the
derivation in the municipality of direct or indirect benefit from
the service.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1991, 72nd Leg., ch. 705, § 27, eff. Sept. 1,
1991.
§ 321.206. INCIDENCE OF ADDITIONAL MUNICIPAL SALES AND
USE TAX. For the purpose of determining the proper sales tax under
this chapter and the proper excise tax on the use, storage, or other
consumption of taxable items under Section 321.101(b):
(1) if a taxable item is used, stored, or otherwise
consumed in a municipality that has adopted the additional
municipal sales and use tax, the statutes listed in Section
322.108(a) apply; and
(2) if the sales tax applies in a municipality that has
not adopted the municipal sales and use tax, the excise tax on the
use, storage, or other consumption of the taxable item does not
apply.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 2, § 14.15(a), eff. Aug. 28,
1989.
§ 321.207. LOCAL TAX INAPPLICABLE WHEN NO STATE TAX;
EXCEPTIONS. (a) The sales tax authorized by this chapter does not
apply to the sale of a taxable item unless the sales tax imposed by
Subchapter C, Chapter 151, also applies to the sale.
(b) The excise tax authorized by this chapter on the use,
storage, or consumption of a taxable item does not apply to the use,
storage, or consumption of a taxable item unless the tax imposed by
Subchapter D, Chapter 151, also applies to the use, storage, or
consumption.
(c) Subsections (a) and (b) do not apply to the taxes
authorized by this chapter on the sale, production, distribution,
lease, or rental of, and the use, storage, or consumption of gas and
electricity for residential use.
(d) Subsection (b) does not apply to the application of the
tax in a situation described by Section 321.205(b).
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1991, 72nd Leg., ch. 705, § 28, eff. Sept. 1,
1991.
§ 321.208. STATE EXEMPTIONS APPLICABLE. The exemptions
provided by Subchapter H, Chapter 151, apply to the taxes
authorized by this chapter, except as provided by Section
151.317(b).
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.209. TRANSITION EXEMPTION: GENERAL PURPOSE SALES
AND USE TAX. (a) For a period of three years only after the
effective date of the tax authorized by Section 321.101(a) in a
municipality, the receipts from the sale of, and the use, storage,
and consumption of, taxable items are exempt from the tax imposed by
the municipality under Section 321.101(a) if the notice required by
Subsection (b) is given and if:
(1) the items are used for the performance of a written
contract entered into before the effective date of the tax imposed
under Section 321.101(a) in the municipality if the contract may be
affected and the contract may not be modified because of the tax; or
(2) the items are used under the obligation of a bid
submitted before the effective date of the tax imposed under
Section 321.101(a) in the municipality if the contract may be
affected and the bid may not be withdrawn or modified because of the
tax.
(b) The taxpayer must give the comptroller notice of the
contract or bid on which an exemption is to be claimed within 60
days after the effective date of the tax imposed under Section
321.101(a) in the municipality.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 2, § 14.14(d), eff. Aug. 28,
1989.
§ 321.2091. TRANSITION EXEMPTION: ADDITIONAL MUNICIPAL
SALES AND USE TAX. (a) The receipts from the sale, use, or rental
of and the storage, use, or consumption of taxable items in this
state are exempt from the adoption or increase of the additional
municipal sales and use tax if the items are used:
(1) for the performance of a written contract entered
into before the date the adoption or increase of the additional tax
takes effect in the municipality, if the contract is not subject to
change or modification by reason of the tax; or
(2) pursuant to an obligation of a bid or bids
submitted prior to the date the adoption or increase of the
additional tax takes effect in the municipality, if the bid or bids
may not be withdrawn, modified, or changed by reason of the tax.
(b) The exemptions provided by this section have no effect
after three years from the date the adoption or increase of the
additional tax takes effect in the municipality.
Added by Acts 1989, 71st Leg., ch. 2, § 14.14(c), eff. Aug. 28,
1989. Amended by Acts 1991, 72nd Leg., ch. 184, § 5, eff. May 24,
1991.
§ 321.210. TELECOMMUNICATIONS EXEMPTION. (a) There
are exempted from the taxes imposed under this chapter the sales
within the municipality of telecommunications services unless the
application of the exemption is repealed under this section. A
municipality may not repeal the application of this exemption as it
applies to interstate long-distance telecommunications services,
but if a municipality has repealed the exemption before the
effective date of Part 4, Article 1, H.B. No. 61, Acts of the 70th
Legislature, 2nd Called Session, 1987, interstate long-distance
telecommunications services in that municipality are not subject to
taxes imposed under this chapter.
(b) The governing body of a municipality by ordinance
adopted by a majority vote of the governing body in the manner
required for the adoption of other ordinances may repeal the
application of the exemption provided by Subsection (a) for
telecommunications services sold within the municipality.
(c) A municipality that has repealed the application of the
exemption may in the same manner reinstate the exemption.
(d) A vote of the governing body of a municipality repealing
the application of or reinstating the exemption must be entered in
the minutes of the municipality. The municipal secretary shall
send to the comptroller by United States certified or registered
mail a copy of each ordinance adopted under this section. The
repeal of the application of the exemption or a reinstated
exemption takes effect within the municipality as provided by
Section 321.102(a) after receipt of a copy of the ordinance.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 5, art. 1, pt. 4, §
33.
SUBCHAPTER D. ADMINISTRATION OF TAXES
§ 321.301. COMPTROLLER TO COLLECT AND ADMINISTER
TAXES. The comptroller shall administer, collect, and enforce any
tax imposed by a municipality under this chapter. The taxes imposed
under this chapter and the tax imposed under Chapter 151 shall be
collected together, if both taxes are imposed.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.302. COMPTROLLER'S REPORTING DUTIES. (a) The
comptroller shall make quarterly reports to a municipality that has
adopted the taxes authorized by this chapter if the municipality
requests the reports. A report must include the name, address, and
account number of each person in the municipality that has remitted
to the comptroller a tax payment during the quarter covered by the
report.
(b) If a municipality requests an additional report, the
comptroller shall make an additional quarterly report to the
municipality including the name, address, and account number, if
any, of, and the amount of tax due from, each person doing business
in the municipality who has failed to pay the tax under this chapter
to the municipality or under Chapter 151. The additional report
must also include statements:
(1) showing whether or not there has been a partial tax
payment by the delinquent taxpayer;
(2) showing whether or not the taxpayer is delinquent
in the payment of sales and use taxes to the state; and
(3) describing the steps taken by the comptroller to
collect the delinquent taxes.
(c) If a municipality determines that a person doing
business in the municipality is not included in a comptroller's
report, the municipality shall report to the comptroller the name
and address of the person. Within 90 days after receiving the
report from a municipality, the comptroller shall send to the
municipality:
(1) an explanation as to why the person is not
obligated for the municipal tax;
(2) a statement that the person is obligated for the
municipal tax and the tax is delinquent; or
(3) a certification that the person is obligated for
the municipal tax and that the full amount of the tax due has been
credited to the municipality's account.
(d) The comptroller shall send by United States certified or
registered mail to the municipal tax collector a notice of each
person who is delinquent in the payment to the municipality of the
taxes authorized by this chapter and shall send a copy of the notice
to the attorney general. A notice sent under this subsection is a
certification of the amount of tax owed and is prima facie evidence
of a determination of that amount and of its delinquency.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.3022. TAX INFORMATION. (a) The comptroller on
request shall provide to a municipality that has adopted a tax under
this chapter and that has a population of not more than 275,000
information relating to the amount of tax paid to the municipality
under this chapter during the preceding or current calendar year by
each person doing business in the municipality who annually remits
to the comptroller state and local sales tax payments of more than
$25,000.
(b) The comptroller on request shall provide to a
municipality that has adopted a tax under this chapter information
relating to the amount of tax paid to the municipality under this
chapter during the preceding or current calendar year by each
person doing business in an area, as defined by the municipality,
that is part of:
(1) an interlocal agreement;
(2) a tax abatement agreement;
(3) a reinvestment zone;
(4) a tax increment financing district;
(5) a revenue sharing agreement;
(6) an enterprise zone;
(7) a neighborhood empowerment zone;
(8) any other agreement, zone, or district similar to
those listed in Subdivisions (1)-(7); or
(9) any area defined by the municipality for the
purpose of economic forecasting.
(c) The comptroller shall provide the information under
Subsection (b) as an aggregate total for all persons doing business
in the defined area without disclosing individual tax payments.
(d) If the request for information under Subsection (b)
involves not more than three persons doing business in the defined
area who remit taxes under this chapter, the comptroller shall
refuse to provide the information to the municipality unless the
comptroller receives permission from each of the persons allowing
the comptroller to provide the information to the municipality as
requested.
(e) A request for information under this section must be
made in writing by the municipality's mayor or chief administrative
officer.
(f) Information received by a municipality under this
section is confidential, is not open to public inspection, and may
be used only for the purpose of economic forecasting, for internal
auditing of a tax paid to the municipality under this chapter, or
for the purpose described in Subsection (g).
(g) Information received by a municipality under Subsection
(b) may be used by the municipality to assist in determining revenue
sharing under a revenue sharing agreement or other similar
agreement.
(h) The comptroller may set and collect from a municipality
reasonable fees to cover the expense of compiling and providing
information under this section.
(i) Notwithstanding Chapter 551, Government Code, the
governing body of a municipality is not required to confer with one
or more employees or a third party in an open meeting to receive
information or question the employees or third party regarding the
information received by the municipality under this section.
Added by Acts 1995, 74th Leg., ch. 1000, § 70, eff. Oct. 1, 1995.
Amended by Acts 1999, 76th Leg., ch. 291, § 1, eff. May 29, 1999;
Acts 2001, 77th Leg., ch. 840, § 1, eff. June 14, 2001; Acts
2003, 78th Leg., ch. 1285, § 1, 2.
§ 321.3025. DISPOSITION OF AMOUNT ERRONEOUSLY
COLLECTED. (a) If in a territory added to a municipality a
retailer erroneously collects an amount as a tax imposed under this
chapter before the date the taxes imposed under this chapter by the
municipality take effect in the added territory under Section
321.102, the amount collected is treated as if it were revenue from
the taxes imposed by the municipality under this chapter, and the
comptroller shall collect and administer the amount in the same
manner as tax revenue.
(b) This section does not affect the right of a person who
paid an amount erroneously collected by a retailer to claim a refund
or the authority of the comptroller to make a refund of that amount.
Added by Acts 1989, 71st Leg., ch. 291, § 1, eff. June 14, 1989.
§ 321.303. SALES TAX PERMITS AND EXEMPTION AND RESALE
CERTIFICATES. (a) Each place of business of a retailer must have
a permit issued by the comptroller under Subchapter F, Chapter 151.
(b) The same sales tax permit, exemption certificate, and
resale certificate required by Chapter 151 for the administration
and collection of the taxes imposed by that chapter satisfy the
requirements of this chapter. No additional permit or exemption or
resale certificate may be required except that the comptroller may
prescribe a separate exemption certificate form for the transition
exemption for prior contracts and bids under Section 321.209.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.304. DISCOUNTS FOR PREPAYMENT AND TAX
COLLECTION. All discounts allowed a retailer under Chapter 151 for
the collection and prepayment of the taxes under that chapter are
allowed and applicable to the taxes collected under this chapter.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.305. PENALTIES. The penalties provided by
Chapter 151 for violations of that chapter apply to violations of
this chapter.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.306. COMPTROLLER'S RULES. The comptroller may
adopt reasonable rules and prescribe forms that are consistent with
this chapter for the administration, collection, reporting, and
enforcement of this chapter.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.307. DELINQUENT TAXES: LIMITATIONS. The
limitations for the bringing of a suit for the collection of a tax
imposed or a penalty due under this chapter after the tax and
penalty are delinquent or after a determination against the
taxpayer are the same as limitations provided by Chapter 151.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.308. SEIZURE AND SALE OF PROPERTY. If the
comptroller lawfully seizes property for the payment of the taxes
imposed under Chapter 151 and the property owner is delinquent in
the payment of taxes under this chapter, the comptroller shall sell
sufficient property to pay the delinquent taxes and penalties of
both taxes. The proceeds of a sale of seized property shall first
be applied to the payment of amounts due the state and the
remainder, if any, to the amounts due to the municipality to which
the taxes are due.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.309. SUIT FOR TAX COLLECTION. (a) A
municipality acting through its attorney may join as a plaintiff in
any suit brought by the attorney general to seek a judgment for
delinquent taxes and penalties due to the municipality under this
chapter.
(b) A municipality may bring suit for the collection of
taxes owed to the municipality under this chapter if:
(1) the taxes are certified by the comptroller in the
notice required by Section 321.302(d);
(2) a written notice of the tax delinquency and the
municipality's intention to bring suit is given by certified mail
to the taxpayer, the attorney general, and the comptroller at least
60 days before the suit is filed; and
(3) neither the comptroller nor the attorney general
disapproves of the suit.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.310. DISAPPROVAL OF MUNICIPAL SUIT. (a) The
comptroller or the attorney general may disapprove of the
institution of a suit by a municipality under Section 321.309(b)
if:
(1) negotiations between the state and the taxpayer
are being conducted for the purpose of the collection of delinquent
taxes owed to the state and the municipality seeking to bring suit;
(2) the taxpayer owes substantial taxes to the state
and there is a reasonable possibility that the taxpayer may be
unable to pay the total amount owed;
(3) the state will bring suit against the taxpayer for
all taxes due under Chapter 151 and this chapter; or
(4) the suit involves a critical legal question
relating to the interpretation of state law or a provision of the
Texas or United States constitution in which the state has an
overriding interest.
(b) A notice of disapproval to a municipality must be in
writing and give the reason for the determination by the
comptroller or attorney general.
(c) A disapproval is final and not subject to review.
(d) Not earlier than one year after the date of a
disapproval of the institution of a municipal collection suit, the
municipality may again proceed as provided by Section 321.309(b)
even though the liability of the taxpayer includes taxes for which
the municipality has previously given notice and the comptroller or
attorney general has disapproved of the suit.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.311. JUDGMENTS IN MUNICIPAL SUIT. (a) A
judgment in a suit under Section 321.309(b) for or against a
taxpayer does not affect a claim against the taxpayer by another
municipality or the state unless the state is party to the suit.
(b) A municipality shall abstract a copy of each final
judgment for taxes imposed under this chapter in a case in which the
state is not a party and shall send to the comptroller a copy of the
judgment and the abstract.
(c) A municipality shall by execution collect the taxes
awarded to it in each judgment received by the municipality and is
responsible for the renewal of the judgment before its expiration.
(d) The municipality shall notify the comptroller by
certified mail of the amount of any taxes collected on the judgment.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.312. RETENTION OF CERTAIN MUNICIPAL SALES
TAXES. A municipality that holds a sales and use tax permit issued
by the comptroller and that imposes a sales and use tax may retain
the portion of the tax that the municipality collects and that
constitutes the municipality's own tax. The municipality shall
remit to the comptroller all other applicable local sales and use
taxes and the state sales and use tax.
Added by Acts 2001, 77th Leg., ch. 1263, § 75, eff. Oct. 1, 2001.
SUBCHAPTER E. TAX ELECTION PROCEDURES
§ 321.401. CALLING OF ELECTION. (a) An election under
this chapter is called by the adoption of an ordinance by the
governing body of a municipality.
(b) The governing body may call the election by a vote of a
majority of its members.
(c) The governing body shall call the election if a number
of qualified voters of the municipality equal to at least 20 percent
of the number of votes cast in the most recent regular municipal
election petitions the governing body for a vote on the question.
(d) The governing body of any municipality that has not
adopted the additional sales and use tax shall, on petition of
qualified voters of the municipality equal in number to at least
five percent of the number of voters registered in the
municipality, provide by ordinance for the calling and holding of
an election on the question of adopting the additional sales and use
tax.
(e) The governing body of any municipality that has adopted
the additional sales and use tax shall, on petition of qualified
voters of the municipality equal in number to at least five percent
of the number of voters registered in the municipality, provide by
ordinance for the calling and holding of an election on the question
of increasing, reducing, or repealing the additional sales and use
tax.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1991, 72nd Leg., ch. 184, § 6, eff. May 24, 1991.
§ 321.402. DEADLINES AFTER PETITION. (a) After the
receipt of a petition for an election under this chapter, the
governing body of a municipality shall determine the sufficiency of
the petition within 30 days.
(b) If the petition is sufficient, the governing body shall
pass the ordinance calling the election within 60 days after
receiving the petition.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.403. TIME OF ELECTION. (a) An election under
this chapter to adopt the tax authorized under Section 321.101(a)
must be held on the first succeeding uniform election date for which
sufficient time elapses for the holding of an election.
(b) An election on the approval of the additional sales and
use tax must be held on the next succeeding uniform election date
not less than 30 days after the passage of the ordinance calling the
election.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.404. BALLOT WORDING. (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" 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" (one-eighth,
one-fourth, three-eighths, or one-half to be inserted as
appropriate).
(b) In an election to repeal the tax, the ballot shall be
printed to provide for voting for or against the applicable
proposition: "The local sales and use tax within the city is
abolished" or "The abolition of the additional sales and use tax
within the city."
(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"
(one-eighth, one-fourth, three-eighths, or one-half to be inserted
as appropriate).
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 2, § 14.14(b), eff. Aug. 28,
1989; Acts 1991, 72nd Leg., ch. 184, § 7, eff. May 24, 1991.
§ 321.405. OFFICIAL RESULTS OF ELECTION. (a) Within
10 days after an election in which the voters approve of the
adoption 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.
(b) If the application of the taxes that may be imposed
under this chapter is changed by the results of the election, the
municipal secretary shall send to the comptroller by United States
certified or registered mail a certified copy of the resolution or
the ordinance along with a map of the municipality clearly showing
its boundaries.
(c) Not later than the 30th day after the date the
comptroller receives a certified copy of an ordinance or resolution
showing the adoption of the additional municipal sales and use tax,
the comptroller shall notify the municipal secretary that he is
prepared for the administration of the tax.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.406. FREQUENCY OF ELECTION. An election under
this chapter in a municipality may not be held earlier than one year
after the date of any previous election under this chapter in the
municipality.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.407. ELECTION CONTEST: NOTICE. (a) If an
election held under this chapter is contested, the contestant shall
send to the comptroller by United States certified or registered
mail within 10 days after the filing of the contest a notice of
contest containing the style of the suit, the date it was filed, its
case number, and the name of the court in which the contest is
pending.
(b) A court may not hear an election contest of an election
held under this chapter unless the comptroller is notified within
the time and in the manner provided by this section.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.408. ELECTION CONTEST: DELAYED EFFECTIVE
DATE. (a) When the comptroller receives a notice of contest of an
election under this chapter, the effective date of the tax or the
abolition of a tax is suspended.
(b) When a final judgment is entered in the election
contest, the municipal secretary shall notify the comptroller by
United States certified or registered mail and enclose a certified
copy of the final judgment.
(c) If the final judgment in the election contest results in
a change in the tax status of the municipality under this chapter,
the tax or the abolition of the tax takes effect as provided by
Section 321.102 except that the notice of the final judgment is
substituted for the notice of election results prescribed by
Section 321.405.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
SUBCHAPTER F. REVENUE DEPOSIT, DISTRIBUTION, AND USE
§ 321.501. TRUST ACCOUNT. (a) The comptroller shall
deposit the taxes collected by the comptroller under this chapter
in trust in the separate suspense account of the municipality from
which the taxes were collected.
(b) Repealed by Acts 2003, 78th Leg., ch. 285, § 31(44).
(c) Repealed by Acts 2003, 78th Leg., ch. 285, § 31(44).
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1997, 75th Leg., ch. 1423, § 19.123, eff. Sept.
1, 1997; Acts 2003, 78th Leg., ch. 285, § 31(44), eff. Sept. 1,
2003.
§ 321.502. DISTRIBUTION OF TRUST FUNDS. At least twice
during each state fiscal year and at other times as often as
feasible, the comptroller shall send to the municipal treasurer or
to the person who performs the office of the municipal treasurer
payable to the municipality the municipality's share of the taxes
collected by the comptroller under this chapter.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.503. STATE'S SHARE. Before sending any money to a
municipality under this subchapter the comptroller shall deduct two
percent of the amount of the taxes collected within the
municipality during the period for which a distribution is made as
the state's charge for its services under this chapter and shall,
subject to premiums payments under Section 321.501(c), credit the
money deducted to the general revenue fund.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.504. AMOUNTS RETAINED IN TRUST ACCOUNT. (a) The
comptroller may retain in the suspense account of a municipality a
portion of the municipality's share of the tax collected for the
municipality under this chapter, not to exceed five percent of the
amount remitted to the municipality. If the municipality has
abolished the tax, the amount that may be retained may not exceed
five percent of the final remittance to the municipality at the time
of the termination of the collection of the tax.
(b) From the amounts retained in a municipality's suspense
account, the comptroller may make refunds for overpayments to the
account and to redeem dishonored checks and drafts deposited to the
credit of the account.
(c) Before the expiration of one year after the effective
date of the abolition of a municipality's tax under this chapter the
comptroller shall send to the municipality the remainder of the
money in the municipality's account and shall close the account.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.505. INTEREST ON TRUST ACCOUNT. Interest earned
on all deposits made with the comptroller under Section 321.501,
including interest earned from retained suspense accounts, shall be
credited to the general revenue fund.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1997, 75th Leg., ch. 1423, § 19.124, eff. Sept.
1, 1997.
§ 321.506. USE OF TAX REVENUE BY MUNICIPALITY. Except
as provided by Section 321.507, the money received by a
municipality under this chapter is for the use and benefit of the
municipality and may be used for any purpose for which the general
funds of the municipality may be used, except that a municipality
may not pledge the revenue received under this chapter to the
payment of bonds or other indebtedness.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
§ 321.507. USE OF ADDITIONAL MUNICIPAL SALES AND USE
TAX. (a) In each year in which a municipality imposes an
additional municipal sales and use tax, if the revenue from the
collection of the additional tax exceeds the amount of taxes
computed for the municipality under Section 26.04(c), except for
the amount required to be deposited in a special account under
Subsection (b), the excess shall be deposited in an account to be
called the municipal sales tax debt service fund. Revenue
deposited in the municipal sales tax debt service fund may be spent
only for the reduction of lawful debts of the municipality, except
that deposits that exceed the amount of revenue needed to pay the
debt service needs of the municipality in the current year may be
used for any municipal purpose consistent with the municipal
budget.
(b) Revenue from the collection of the additional municipal
sales and use tax in each of the first three years in which the tax
is imposed in the municipality in excess of the amount determined as
provided by Section 26.041(d), for each year shall be deposited in
an account to be called the excess sales tax revenue fund. During
those three years, revenue deposited in the excess sales tax
revenue fund may be spent only if and to the extent that taxes or
other revenues of the municipality are collected in amounts less
than anticipated. After that period, the revenue in the fund may be
used for any municipal purpose consistent with the municipality's
budget. The fund ceases to exist when all revenue deposited in the
fund has been spent. This subsection does not apply to a
municipality that does not impose a property tax.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
Amended by Acts 1989, 71st Leg., ch. 2, § 14.16(a), eff. Aug. 28,
1989.
§ 321.508. PLEDGE OF TAX REVENUE. (a) A municipality
may call and hold an election on the issue of authorizing the
municipality to pledge a percentage of the sales and use tax revenue
received under Section 321.101(a) or (b), or both, to the payment of
obligations issued to pay all or part of the costs of one or more
sports and community venue projects located in the municipality.
(b) The ballot at the election under this section must be
printed to permit voting for or against the proposition:
"Authorizing the City of ______ (insert name of municipality) to
pledge not more than ______ percent (insert percentage not to
exceed 25 percent) of the revenue received from the _________
(insert municipal sales and use tax, additional municipal sales and
use tax, or both) previously adopted in the city to the payment of
obligations issued to pay all or part of the costs of _________
(insert description of each sports and community venue project)."
(c) If a majority of the voters vote in favor of the
proposition, the municipality may:
(1) issue bonds, notes, or other obligations that are
payable from the pledged revenues to pay for all or part of the
costs of the sports and community venue project or projects
described in the proposition; and
(2) set aside the portion of the revenue approved at
the election that the municipality actually receives and pledge
that revenue as security for the payment of the bonds, notes, or
other obligations.
(d) If the municipality pledges revenue under Subsection
(c), the pledge and security interest shall continue while the
bonds, notes, or obligations, including refunding obligations, are
outstanding and unpaid.
(e) The municipality may direct the comptroller to deposit
the pledged revenue to a trust or account as may be required to
obtain the financing and to protect the related security interest.
(f) Sections 321.506 and 321.507 do not apply to taxes
pledged under this section.
(g) In this section, "sports and community venue project"
has the meaning assigned by Section 334.001, Local Government Code.
Added by Acts 1997, 75th Leg., ch. 551, § 4, eff. Sept. 1, 1997.
§ 321.509. TAX POWERS OF MUNICIPALITY NOT LIMITED. This
chapter does not abolish or limit the tax powers of a municipality.
Added by Acts 1987, 70th Leg., ch. 191, § 1, eff. Sept. 1, 1987.
