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TX HB5169

TX HB5169
Relating to limitations applicable to certain agreements providing for a rebate of municipal sales and use taxes or a grant or loan based on those taxes.


summary

Introduced
03/14/2025
In Committee
05/07/2025
Crossed Over
Passed
Dead
06/02/2025

Introduced Session

89th Legislature Regular Session

Bill Summary

AN ACT relating to limitations applicable to certain agreements providing for a rebate of municipal sales and use taxes or a grant or loan based on those taxes.

AI Summary

This bill establishes new limitations on municipal sales tax incentive agreements involving retailer relocations or new business establishments. Specifically, the bill addresses situations where a municipality agrees to rebate sales taxes or provide grants/loans to a retailer or its affiliated group in exchange for moving a business location within Texas. The legislation requires that such agreements must have a genuine economic purpose beyond simply shifting tax revenue between municipalities. To qualify, the agreement must demonstrably change the retailer's economic position in a meaningful way and have a substantial business purpose unrelated to tax benefits. If the state comptroller determines that a municipality has entered into an agreement that violates these requirements, the comptroller can disregard the new business location when determining sales tax jurisdictions and can revoke the retailer's sales tax permit for that location. The key goal appears to be preventing municipalities from engaging in tax-shifting schemes that do not create real economic value or development. The bill will take effect on September 1, 2025, giving municipalities and businesses time to adjust to the new requirements.

Committee Categories

Budget and Finance

Sponsors (1)

Last Action

Placed on General State Calendar (on 05/15/2025)

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