Tax & Accounting Blog

Two More Combined Tax Areas In Texas

Blog, Indirect Tax, ONESOURCE July 22, 2016

Texas has added two new combined tax areas since April:

Fate/Rockwall County Assistance District (effective April 1st 2016)

Cleveland/East Montgomery County Improvement District (effective July 1st 2016)

This brings the total number of combined tax areas in Texas up to 42.

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 supported by Onesource Indirect Tax Determination.