HB 312 is a new Texas state law that gives our cities and counties the power to ask voters about a supplemental local sales and use tax. This law creates a clear path for communities to seek voter approval on a new tax that could help with property tax relief and fund local services.
The law sets up how this process works. A city or county can hold an election asking voters to approve or reject a new sales tax. The ballot would clearly state the tax rate and explain that money would go toward reducing property taxes and providing revenue for community services. Voters get to decide whether their community takes this step.
There are important limits built into the law. The sales tax rate cannot exceed 1 percent. Once voters approve the tax, it takes effect on the next January 1 that arrives at least six months after the election results reach the state comptroller. This gives communities and businesses time to prepare.
The law also specifies how the money would be used. Half of the revenue goes directly to property tax relief. The other half can be used for any purpose the city or county's general budget allows, such as roads, schools, public safety, or other community needs. This dual purpose gives communities flexibility while ensuring property taxes decrease.
This law opens a new option for our communities to strengthen their finances while supporting property tax relief. Cities and counties can now decide whether to ask their voters about this opportunity.
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