Tex.
Spec. Dist. Local Laws Code Section 3875.111
Limited Sales and Use Tax
(a)
Words and phrases used in this section that are defined by Chapters 151 (Limited Sales, Excise, and Use Tax) and 321 (Municipal Sales and Use Tax Act), Tax Code, have the meanings assigned by Chapters 151 (Limited Sales, Excise, and Use Tax) and 321 (Municipal Sales and Use Tax Act), Tax Code.(b)
Except as otherwise provided in this section, Subtitles A and B, Title 2, Tax Code, and Chapter 151 (Limited Sales, Excise, and Use Tax), Tax Code, apply to the taxes and to the administration and enforcement of the taxes imposed by the district in the same manner that those laws apply to state taxes.(c)
The district may adopt, reduce, or repeal the limited sales and use tax authorized by this section at an election in which a majority of the qualified voters of the district voting in the election approve the adoption or the abolition of the tax, as applicable.(d)
The provisions of Subchapters C, D, E, and F, Chapter 323 (County Sales and Use Tax Act), Tax Code, relating to county sales and use taxes shall apply to the application, collection, and administration of a sales and use tax imposed under this section to the extent consistent with this chapter, as if references in Chapter 323 (County Sales and Use Tax Act), Tax Code, to a county referred to the district and references to a commissioners court referred to the board. Sections 323.401-323.404 and 323.505 (Use of Tax Revenue), Tax Code, do not apply to a tax imposed under this section.(e)
A tax imposed under this section or the repeal or reduction of a tax under this section takes effect on the first day of the calendar quarter occurring after the date on which the comptroller receives the copy of the resolution as required by Section 323.405 (Official Results of Election)(b), Tax Code.(f)
On adoption of the tax authorized by this section, there is imposed a tax of two percent, or the maximum rate at which the combined tax rate of all local sales and use taxes in any location in the district does not exceed two percent, on the receipts from the sale at retail of taxable items within the district, and an excise tax on the use, storage, or other consumption within the district of taxable items purchased, leased, or rented from a retailer within the district during the period that the tax is in effect. 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 item. With respect to a taxable service, “use” means the derivation in the district of direct or indirect benefit from the service.(g)
An election to authorize, reduce, or repeal a limited sales and use tax may be called by order of the board and must be held on the next available uniform election date established by Section 41.001 (Uniform Election Dates), Election Code, that occurs 45 or more days after the date on which the order calling the election was passed. Notice of the election shall be given and the election shall be held and conducted in the manner prescribed by Chapter 54 (Municipal Utility Districts), Water Code, for bond elections for municipal utility districts. The ballots shall be printed to provide for voting for or against the appropriate proposition:(1)
“Adoption of a ___ percent district sales and use tax within the district;”(2)
“Reduction of the district sales and use tax within the district from ___ percent to ___ percent;” or(3)
“Abolition of the district sales and use tax within the district.”(h)
If all or part of the territory of the district is annexed by a municipality that has adopted and is imposing a sales and use tax, the sales and use tax imposed by the district in the annexed territory shall be reduced, if required, in even multiples of one-eighth percent, and without the necessity for an election, so that the combined rate of all sales and use taxes imposed by the county, the annexing municipality, and all other political subdivisions within the annexed territory of the district will not exceed two percent, provided that a sales and use tax previously adopted by the district for the annexed territory shall not be reduced to less than one-half percent, and provided further that no reduction of the district’s sales and use tax in the portions of the district not so annexed shall be required.(i)
A tax imposed under this section or the reduction or repeal of a tax under this section takes effect on the first day of the calendar quarter occurring after the date on which the comptroller receives the notice required by Section 323.405 (Official Results of Election)(b), Tax Code.(j)
Not later than the 10th day after the date of the annexation or exclusion of territory by the district or the annexation of all or part of the territory of the district by a municipality requiring a reduction of the district’s sales and use tax as provided by Subsection (h), the board shall send to the comptroller, by certified or registered mail, certified copies of all resolutions, orders, or ordinances pertaining to the annexation or exclusion of the territory by a district or municipality.(k)
The district may examine and receive information related to the imposition, assessment, and collection of sales and use taxes to the same extent as if the district were a municipality.
Source:
Section 3875.111 — Limited Sales and Use Tax, https://statutes.capitol.texas.gov/Docs/SD/htm/SD.3875.htm#3875.111 (accessed Jun. 5, 2024).
