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WS Item 4 Community Recreation Center Update: Local Option Sales Tax Discussion March 4, 2014 Purpose Review local option sales tax guidelines per state law Understand City’s current local options sales tax uses Review recommendation to provide funding for CRC www.SouthlakeCRC.com www.SouthlakeCRC.com www.SouthlakeCRC.com Texas Local Sales and Use Tax Texas state sales tax rate = 6.25% Cities may impose additional 2% sales tax Total maximum combined rate = 8.25% Southlake uses 2% allowance All local sales taxes require voter approval www.SouthlakeCRC.com Local Option Sales Tax Possibilities www.SouthlakeCRC.com Local Option Sales Tax Possibilities = ⅛ % www.SouthlakeCRC.com Local Option Sales Tax Possibilities = ¼ % www.SouthlakeCRC.com Local Option Sales Tax Possibilities = ⅜ % www.SouthlakeCRC.com Local Option Sales Tax Possibilities = ½ % www.SouthlakeCRC.com Current Southlake Sales Tax Distribution www.SouthlakeCRC.com 1% Current Southlake Sales Tax Distribution www.SouthlakeCRC.com ½% ½% Proposed Sales Tax Distribution www.SouthlakeCRC.com ½% ⅛% Proposed Sales Tax Distribution www.SouthlakeCRC.com ⅜% ½% ⅛% Staff Recommendation Provides great flexibility for City Uses: create primary jobs; job training classes, targeted infrastructure, etc. Type B projects are also allowed with voter approval Managed by development corporation Chapters 501-505, Local Govt Code Election in May 2015 Example Proposition Language Decrease CCPD tax to 1/8% Adopt a Type A sales tax at 3/8% Specifically for building and operating a community recreational center Promotion and development of new and expanded business enterprises www.SouthlakeCRC.com Conclusion Community Recreation Center Questions? Example Proposition Language The decrease of the one-half percent (1/2%) Crime Control and Prevention District sales and use tax to one-eighths percent (1/8%) and the adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of three-eighths percent (3/8%) to be used for projects authorized by Chapters 504 and 505 of the Texas Local Government Code, including specifically a community recreational center and land, buildings, equipment, facilities, or improvements that provide new or expanded business enterprises that create or retain primary jobs as authorized by Section 505.155 of the Texas Local Government Code.