Type A and B Economic Development Corporations

Disclaimer:

This information should not be construed as, and is not a substitute for, legal advice.

Cities are urged to consult the Attorney General’s Economic Development Handbook and their own legal counsel for any questions or interpretations of economic development laws.

Tax Programs/Incentives

When tax collection and allocation starts

Certifying election results

If voters approve the tax, the governing body must adopt a resolution or ordinance declaring the election results in meeting minutes. The city secretary must send the certified copy of the resolution or ordinance with the election results to the Revenue Accounting, Tax Allocation Section of the Comptroller’s office. The information sent to the Comptroller must include:

  • the date the election was held;
  • the proposition voted on;
  • number of votes cast for adoption;
  • number of votes cast against adoption;
  • number of votes by which the proposition was approved; and
  • a statement that the proposition did pass.

The Comptroller’s office must receive this information from the city secretary through U.S. certified or registered mail. The Comptroller’s office will notify the city secretary when it is ready to handle the administration of the tax.

Comptroller’s address

Comptroller of Public Accounts
Revenue Accounting Division
Tax Allocation Section
P.O. Box 13528
Austin, TX 78711-3528

Effective dates for tax collections

The tax becomes effective after one complete calendar quarter elapses from the date the Comptroller’s office receives notification of voter approval. For example, if voters approve the tax in May, and the Comptroller’s office receives notification in June, then the tax becomes effective on Oct. 1, after the calendar quarter of July-August-September has elapsed. The Comptroller’s office will notify area merchants to begin collecting the new tax rate on Oct. 1. The city will begin receiving revenue from the tax in December.

Allocation by Comptroller’s office

The Comptroller’s office will issue a payment for the total city tax and a letter with the first payment (that includes the economic development sales tax) with instructions explaining how to calculate the portion due the city and the amount due the development corporation. After a city receives the sales and use tax revenues from the Comptroller’s office, the city must deliver the revenue to the development corporation.