Tax & Accounting Blog

Texas Adds Three Combined Tax Areas Effective January 1st 2016

Blog, Indirect Tax, ONESOURCE, Sales and Use Tax January 25, 2016

Effective January 1st, the following three combined tax areas are recognized by the state of Texas:

Forney/Kaufman County Development District

Killeen/Salado Public Library District

Niederwald/Caldwell Hays Emergency Services District No. 1-A

This brings the total number of combined tax areas in the state of Texas up to 40. Combined tax areas are “unique areas where a portion of a city overlaps another taxing jurisdiction, resulting in a total local tax rate that would exceed two percent” (http://comptroller.texas.gov/taxinfo/local/combined.html). In these areas a combined area local code is used in place of the regular city code for reporting. The combined area local code indicates a tax rate of 2% or less, insuring that the Texas maximum local tax of 2% is not exceeded in any location.

These combined tax areas are now completely supported by Onesource Indirect Tax Determination. Customers can learn more in the February content release letter.