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
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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
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Local Option Sales Tax Possibilities
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Local Option Sales Tax Possibilities = ⅛ %
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Local Option Sales Tax Possibilities = ¼ %
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Local Option Sales Tax Possibilities = ⅜ %
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Local Option Sales Tax Possibilities = ½ %
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Current Southlake Sales Tax Distribution
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1%
Current Southlake Sales Tax Distribution
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½%
½%
Proposed Sales Tax Distribution
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½%
⅛%
Proposed Sales Tax Distribution
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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
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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.