Texas Tax Code 311.0123 – Sales Tax Increment
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(a) In this section, “sales tax base” for a reinvestment zone means the amount of municipal sales and use taxes attributable to the zone for the year in which the zone was designated under this chapter.
(b) The governing body of a municipality may determine, in an ordinance designating an area as a reinvestment zone or in an ordinance adopted subsequent to the designation of a zone, the portion or amount of tax increment generated from municipal sales and use taxes attributable to the zone, above the sales tax base, to be deposited into the tax increment fund. Nothing in this section requires a municipality to contribute sales tax increment into a tax increment fund.
Terms Used In Texas Tax Code 311.0123
- Comptroller: means the Comptroller of Public Accounts of the State of Texas. See Texas Tax Code 1.04
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Year: means 12 consecutive months. See Texas Government Code 311.005
(c) Before the issuance of a bond, note, or other obligation under this chapter that pledges the payments into the tax increment fund under Subsection (b), the governing body of a municipality may enter into an agreement, under Subchapter E, Chapter 271, Local Government Code, to authorize and direct the comptroller to:
(1) withhold from any payment to which the municipality may be entitled the amount of the payment into the tax increment fund under Subsection (b);
(2) deposit that amount into the tax increment fund; and
(3) continue withholding and making additional payments into the tax increment fund until an amount sufficient to satisfy the amount due has been met.
(d) A local government corporation created under Chapter 431, Transportation Code, that has contracted with a reinvestment zone and a municipality under § 311.010(f) may be a party to an agreement under Subsection (c) and the agreement may provide for payments to be made to a paying agent of the local government corporation.
(e) The sales and use taxes to be deposited into the tax increment fund under this section may be disbursed from the fund only to:
(1) satisfy claims of holders of tax increment bonds, notes, or other obligations issued or incurred for the reinvestment zone;
(2) pay project costs for the zone; and
(3) make payments in accordance with an agreement made under § 311.010(b) dedicating revenue from the tax increment fund.