The state laws of Texas set forth guidelines that regulate the amount of sales tax local governments can charge. Generally, all cities in Texas can collect a 1% sales tax on taxable sales within their jurisdictional limits. To increase this percentage; however, a local election must be held authorizing an increase in the sales tax percentage.
The City of Mesquite has increased its sales tax percentage twice. In fiscal year 1992-93, citizens voted to increase the sales tax rate from 1.0% to 1.5%. There was a corresponding reduction in the property tax rate to offset the increased sales tax revenues.
In fiscal year 1998-99, the citizens again voted to increase the sales tax percentage by an additional 0.5%, bringing the local sales tax option to 2.0%, the maximum percentage allowed cities under current state law. Revenue generated from this additional ½ cent must be used for Transportation Improvements, Public Safety Improvements, and Public Parks and Recreation Improvements. This sales tax revenue is administered by the Mesquite Quality of Life Corporation after approval by the Mesquite City Council.
The State of Texas is responsible for determining its sales tax percentage.