Tex. Tax Code Section 26.041
Tax Rate of Unit Imposing Additional Sales and Use Tax


(a)

In the first year in which an additional sales and use tax is required to be collected, the no-new-revenue tax rate and voter-approval tax rate for the taxing unit are calculated according to the following formulas:
NO-NEW-REVENUE TAX RATE = [(LAST YEAR’S LEVY - LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] - SALES TAX GAIN RATE
and
VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x 1.08) + (CURRENT DEBT RATE - SALES TAX GAIN RATE)
or
VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE + UNUSED INCREMENT RATE - SALES TAX GAIN RATE)
where “sales tax gain rate” means a number expressed in dollars per $100 of taxable value, calculated by dividing the revenue that will be generated by the additional sales and use tax in the following year as calculated under Subsection (d) by the current total value.

(b)

Except as provided by Subsections (a) and (c), in a year in which a taxing unit imposes an additional sales and use tax, the voter-approval tax rate for the taxing unit is calculated according to the following formula, regardless of whether the taxing unit levied a property tax in the preceding year:
VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = [(LAST YEAR’S MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT RATE - SALES TAX REVENUE RATE)
or
VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL TAXING UNIT = [(LAST YEAR’S MAINTENANCE AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED INCREMENT RATE - SALES TAX REVENUE RATE)
where “last year’s maintenance and operations expense” means the amount spent for maintenance and operations from property tax and additional sales and use tax revenues in the preceding year, and “sales tax revenue rate” means a number expressed in dollars per $100 of taxable value, calculated by dividing the revenue that will be generated by the additional sales and use tax in the current year as calculated under Subsection (d) by the current total value.

(c)

In a year in which a taxing unit that has been imposing an additional sales and use tax ceases to impose an additional sales and use tax, the no-new-revenue tax rate and voter-approval tax rate for the taxing unit are calculated according to the following formulas:
NO-NEW-REVENUE TAX RATE = [(LAST YEAR’S LEVY - LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + SALES TAX LOSS RATE
and
VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = [(LAST YEAR’S MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + CURRENT DEBT RATE
or
VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL TAXING UNIT = [(LAST YEAR’S MAINTENANCE AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED INCREMENT RATE)
where “sales tax loss rate” means a number expressed in dollars per $100 of taxable value, calculated by dividing the amount of sales and use tax revenue generated in the last four quarters for which the information is available by the current total value and “last year’s maintenance and operations expense” means the amount spent for maintenance and operations from property tax and additional sales and use tax revenues in the preceding year.

(c-1)

Repealed by Acts 2021, 87th Leg., R.S., Ch. 884 (S.B. 1438), Sec. 10(3), eff. June 16, 2021.

(d)

In order to determine the amount of additional sales and use tax revenue for purposes of this section, the designated officer or employee shall use the sales and use tax revenue for the last preceding four quarters for which the information is available as the basis for projecting the additional sales and use tax revenue for the current tax year. If the rate of the additional sales and use tax is increased or reduced, the projection to be used for the first tax year after the effective date of the sales and use tax change shall be adjusted to exclude any revenue gained or lost because of the sales and use tax rate change. If the unit did not impose an additional sales and use tax for the last preceding four quarters, the designated officer or employee shall request the comptroller of public accounts to provide to the officer or employee a report showing the estimated amount of taxable sales and uses within the unit for the previous four quarters as compiled by the comptroller, and the comptroller shall comply with the request. The officer or employee shall prepare the estimate of the additional sales and use tax revenue for the first year of the imposition of the tax by multiplying the amount reported by the comptroller by the appropriate additional sales and use tax rate and by multiplying that product by .95.

(e)

If a city that imposes an additional sales and use tax receives payments under the terms of a contract executed before January 1, 1986, in which the city agrees not to annex certain property or a certain area and the owners or lessees of the property or of property in the area agree to pay at least annually to the city an amount determined by reference to all or a percentage of the property tax rate of the city and all or a part of the value of the property subject to the agreement or included in the area subject to the agreement, the governing body, by order adopted by a majority vote of the governing body, may direct the designated officer or employee to add to the no-new-revenue and voter-approval tax rates the amount that, when applied to the total taxable value submitted to the governing body, would produce an amount of taxes equal to the difference between the total amount of payments for the tax year under contracts described by this subsection under the voter-approval tax rate calculated under this section and the total amount of payments for the tax year that would have been obligated to the city if the city had not adopted an additional sales and use tax.

(f)

An estimate made by the comptroller under Subsection (d) of this section need not be adjusted to take into account any projection of additional revenue attributable to increases in the total value of items taxable under the state sales and use tax because of amendments of Chapter 151 (Limited Sales, Excise, and Use Tax), Tax Code.

(g)

If the rate of the additional sales and use tax is increased, the designated officer or employee shall make two projections, in the manner provided by Subsection (d), of the revenue generated by the additional sales and use tax in the following year. The first projection must take into account the increase and the second projection must not take into account the increase. The designated officer or employee shall then subtract the amount of the result of the second projection from the amount of the result of the first projection to determine the revenue generated as a result of the increase in the additional sales and use tax. In the first year in which an additional sales and use tax is increased, the no-new-revenue tax rate for the taxing unit is the no-new-revenue tax rate before the increase minus a number the numerator of which is the revenue generated as a result of the increase in the additional sales and use tax, as determined under this subsection, and the denominator of which is the current total value minus the new property value.

(h)

If the rate of the additional sales and use tax is decreased, the designated officer or employee shall make two projections, in the manner provided by Subsection (d), of the revenue generated by the additional sales and use tax in the following year. The first projection must take into account the decrease and the second projection must not take into account the decrease. The designated officer or employee shall then subtract the amount of the result of the first projection from the amount of the result of the second projection to determine the revenue lost as a result of the decrease in the additional sales and use tax. In the first year in which an additional sales and use tax is decreased, the no-new-revenue tax rate for the taxing unit is the no-new-revenue tax rate before the decrease plus a number the numerator of which is the revenue lost as a result of the decrease in the additional sales and use tax, as determined under this subsection, and the denominator of which is the current total value minus the new property value.

(i)

Any amount derived from the sales and use tax that is or will be distributed by a county to the recipient of an economic development grant made under Chapter 381 (County Development and Growth), Local Government Code, is not considered to be sales and use tax revenue for purposes of this section.

(j)

Any amount derived from the sales and use tax that is retained by the comptroller under Chapters 476 (Pan American Games Trust Fund) or 477 (Olympic Games Trust Fund), Government Code, is not considered to be sales and use tax revenue for purposes of this section.
Added by Acts 1986, 69th Leg., 3rd C.S., ch. 10, art. 1, Sec. 17, eff. Jan. 1, 1987. Amended by Acts 1987, 70th Leg., ch. 11, Sec. 11, eff. April 2, 1987; Acts 1987, 70th Leg., ch. 947, Sec. 4, eff. Jan. 1, 1988; Acts 1989, 71st Leg., ch. 256, Sec. 3, eff. Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 184, Sec. 8, eff. May 24, 1991; Acts 1995, 74th Leg., ch. 1012, Sec. 1, eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 165, Sec. 29.04, eff. Sept. 1, 1997; Acts 2003, 78th Leg., ch. 814, Sec. 5.08, eff. Sept. 1, 2003.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 301 (H.B. 4174), Sec. 2.02, eff. April 1, 2021.
Acts 2019, 86th Leg., R.S., Ch. 944 (S.B. 2), Sec. 37, eff. January 1, 2020.
Acts 2021, 87th Leg., R.S., Ch. 884 (S.B. 1438), Sec. 10(3), eff. June 16, 2021.

Source: Section 26.041 — Tax Rate of Unit Imposing Additional Sales and Use Tax, https://statutes.­capitol.­texas.­gov/Docs/TX/htm/TX.­26.­htm#26.­041 (accessed Mar. 23, 2024).

26.01
Submission of Rolls to Taxing Units
26.02
Assessment Ratios Prohibited
26.03
Treatment of Captured Appraised Value and Tax Increment
26.04
Submission of Roll to Governing Body
26.05
Tax Rate
26.06
Notice, Hearing, and Vote on Tax Increase
26.07
Automatic Election to Approve Tax Rate of Taxing Unit Other than School District
26.08
Automatic Election to Approve Tax Rate of School District
26.09
Calculation of Tax
26.10
Prorating Taxes--loss of Exemption
26.11
Prorating Taxes--acquisition by Government
26.012
Definitions
26.12
Units Created During Tax Year
26.013
Unused Increment Rate
26.13
Taxing Unit Consolidation During Tax Year
26.14
Annexation of Property During Tax Year
26.15
Correction of Tax Roll
26.16
Posting of Tax-related Information on County’s Internet Website
26.17
Database of Property-tax-related Information
26.18
Posting of Tax Rate and Budget Information by Taxing Unit on Website
26.041
Tax Rate of Unit Imposing Additional Sales and Use Tax
26.042
Calculation and Adoption of Certain Tax Rates in Disaster Area
26.043
Voter-approval and No-new-revenue Tax Rates in City Imposing Mass Transit Sales and Use Tax
26.044
No-new-revenue Tax Rate to Pay for State Criminal Justice Mandate
26.045
Voter-approval Tax Rate Relief for Pollution Control Requirements
26.051
Evidence of Unrecorded Tax Rate Adoption
26.052
Simplified Tax Rate Notice for Taxing Units with Low Tax Levies
26.061
Notice of Meeting to Vote on Proposed Tax Rate that Does Not Exceed Lower of No-new-revenue or Voter-approval Tax Rate
26.062
Additional Information to Be Included in Tax Rate Notice
26.063
Alternate Provisions for Tax Rate Notice When De Minimis Rate Exceeds Voter-approval Tax Rate
26.065
Supplemental Notice of Hearing on Tax Rate Increase
26.075
Petition Election to Reduce Tax Rate of Taxing Unit Other than School District
26.081
Petition Signatures
26.085
Election to Limit Dedication of School Funds to Junior College
26.111
Prorating Taxes--acquisition by Charitable Organization
26.112
Calculation of Taxes on Residence Homestead of Certain Persons
26.113
Prorating Taxes--acquisition by Nonprofit Organization
26.135
Tax Dates for Certain School Districts
26.175
Property Tax Database Locator Website
26.0441
Tax Rate Adjustment for Indigent Health Care
26.0442
Tax Rate Adjustment for County Indigent Defense Compensation Expenditures
26.0443
Tax Rate Adjustment for Eligible County Hospital Expenditures
26.0444
Tax Rate Adjustment for Defunding Municipality
26.0501
Limitation on Tax Rate of Defunding Municipality
26.1115
Calculation of Taxes on Residence Homestead Generally
26.1127
Calculation of Taxes on Donated Residence Homestead of Disabled Veteran or Surviving Spouse of Disabled Veteran

Accessed:
Mar. 23, 2024

§ 26.041’s source at texas​.gov