The bill, titled "An Act relating to the authority of a municipality or county to impose a supplemental local sales and use tax," allows municipalities and counties in Texas to implement a supplemental local sales and use tax, contingent upon voter approval. The newly added Chapter 328 of the Tax Code outlines the provisions for this tax, including definitions, applicability of existing laws, and the procedures for imposing the tax. Specifically, the tax can be set at a rate not exceeding one percent and is intended to provide additional revenue for property tax relief and general governmental purposes. The bill also stipulates that the supplemental tax will not be included in the calculation of the combined local tax rate.

Additionally, the bill amends existing sections of the Tax Code to incorporate references to the new supplemental local sales and use tax. It clarifies that revenue from this tax will be allocated, with 50 percent designated as additional sales and use tax revenue for the municipality or county, while the remainder can be used for any purpose allowed by the general funds of the municipality or county. The effective date for the provisions related to the amendments will begin on January 1, 2026, for certain tax years, while the overall act will take effect 91 days after the legislative session concludes.

Statutes affected:
Introduced: Tax Code 26.012, Tax Code 31.01 (Tax Code 31, Tax Code 26)