2023 Texas Statutes › Tax Code › Title 3 - Local Taxation › Subtitle C - Local Sales and Use Taxes › Chapter 321 - Municipal Sales and Use Tax Act › Subchapter B. Imposition of Sales and Use Taxes by Municipalities › Section 321.102. Effective Dates: New Tax, Tax Repeal, Boundary Change

Sec. 321.102.  EFFECTIVE DATES:  NEW TAX, TAX REPEAL, BOUNDARY CHANGE.  (a)  A tax imposed under this chapter, a tax rate increase or decrease adopted under this chapter, or the repeal of a tax abolished under this chapter takes effect on the first day of the first calendar quarter occurring after the expiration of the first complete calendar quarter occurring after the date on which the comptroller receives a notice of the action as required by Section 321.405(b).  This subsection does not apply to the additional municipal sales and use tax.
(b)  The additional municipal sales and use tax takes effect or is increased, reduced, or repealed in the municipality on the October 1st after the expiration of the first complete calendar quarter after the date on which the comptroller receives notice from the municipality of the adoption, increase, reduction, or repeal of the additional municipal sales and use tax.
(c)  If a municipality in which the tax imposed under this chapter is in effect changes its boundaries, the municipal secretary shall send by United States registered or certified mail to the comptroller a certified copy of the ordinance that adds or detaches municipal territory and that shows the effective date of the boundary change.  The ordinance must be accompanied by a map clearly showing the added or detached territory.  Except as provided by Subsection (d), the tax takes effect in the added territory or is inapplicable to the detached territory on the first day of the first calendar quarter after the comptroller receives the ordinance and map.
(d)  If, within 10 days after the receipt of an ordinance and map sent under Subsection (c), the comptroller notifies the secretary of the municipality that more time is required, the effective date of the application of the tax in the added or detached area is the first day of the first calendar quarter after the expiration of the first complete calendar quarter occurring after the date on which the comptroller receives the ordinance and map.
(e)  If as a result of the imposition or increase in a sales and use tax by a municipality in which there is located all or part of a local governmental entity that has adopted a sales and use tax or as a result of the annexation by a municipality of all or part of the territory in a local governmental entity that has adopted a sales and use tax the overlapping local sales and use taxes in the area will exceed two percent, the entity's sales and use tax is automatically reduced in that area to a rate that when added to the combined rate of local sales and use taxes will equal two percent.
(f)  If an entity's rate is reduced in accordance with Subsection (e), the comptroller shall withhold from the municipality's monthly sales and use tax allocation an amount equal to the amount that would have been collected by the entity had the municipality not imposed or increased its sales and use tax or annexed the area in the entity less amounts that the entity collects following the municipality's levy of or increase in its sales and use tax or annexation of the area in the entity.  The comptroller shall withhold and pay the amount withheld to the entity under policies or procedures that the comptroller considers reasonable.
(g)  Subsections (e) and (f) do not apply if and during any period in which a local governmental entity has outstanding indebtedness or obligations that are payable wholly or partly from the sales and use tax revenue of the entity.  A municipality may not implement the imposition or increase of the sales and use tax as a result of the circumstances described by Subsection (e) if, as a result of the implementation of that imposition or increase, the combined rate of all sales and use taxes imposed by the municipality, the local governmental entity, and any other political subdivisions having territory in the district would exceed two percent at any location in the municipality.
(h)  A transit authority is not a local governmental entity for the purposes of Subsections (e) and (f).
(i)  Subsection (g) does not apply to a local governmental entity or political subdivision created under Chapter 326, Local Government Code.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987.  Amended by Acts 1989, 71st Leg., ch. 256, Sec. 1, eff. Sept. 1, 1989;  Acts 1991, 72nd Leg., ch. 184, Sec. 3, eff. May 24, 1991;  Acts 1999, 76th Leg., ch. 1467, Sec. 2.67, eff. June 19, 1999;  Acts 2001, 77th Leg., ch. 1263, Sec. 74, eff. Sept. 1, 2001.
Amended by:
Acts 2015, 84th Leg., R.S., Ch. 1246 (H.B. 157), Sec. 13, eff. September 1, 2015.