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Type A and B Tax Frequently Asked Questions
What is a Primary Job?
Some Type A and Type B projects require the creation or retention of primary jobs. A primary job exists at a company which exports products or services to regional, statewide, national or international markets, infusing new dollars into the local economy. It also must be included in specified North American Industry Classification System (NAICS) sector codes.
Is the city required to hire any new city employees as part of the Type A or Type B board requirements?
No, the city is not required to hire any new employees.
Are the economic development corporation board members paid a salary?
No, the board members of a Type A or Type B corporation are not paid. The directors serve without compensation but are entitled to reimbursement for actual expenses.
If the proceeds from the economic development sales tax funds are used to purchase land or property, who owns the land or property?
The EDC would own the land or property. However, the board can choose to convey the property to a business or an institution of higher education for economic development purposes.
How much does the state retain from the local sales tax proceeds?
The state retains 2 percent of the total amount of all local sales and use taxes. The proceeds are used to cover the administrative costs associated with collecting local sales tax. The collection of two percent is assessed overall and is not unique to economic development sales tax.
What types of fees are involved if the city decides to implement the Type A or Type B sales tax?
There are no fees assessed by the Comptroller's office in setting up or implementing the sales tax.
If the territory of a city expands, will the city be required to hold another election to impose the sales tax in the new area?
No, once the Type A or Type B sales tax is approved by the voters at an election, the boundaries where the tax is collected automatically expand with the boundaries of the city.
Can an EDC undertake projects outside city limits?
An EDC may undertake projects outside city limits so long as it is clear that the city benefits from the project. If an EDC undertakes a project outside city limits, it must receive permission to do so from the governing body of the entity with jurisdiction in that area. For example, if an EDC locates a project beyond the city limits, it should seek approval from the county's commissioners court.
Need Help?
For additional information, contact the Data Analysis and Transparency Division via email or at 844-519-5672.