A Review of City Sales Tax Allocation
May 2006
Report Number 06-037
Overall Conclusion
The State Auditor's Office has verified that 520 randomly selected businesses accurately self-reported their locations to the Comptroller of Public Accounts (Comptroller's Office). The accuracy of location information that businesses self-report--specifically the incorporated city in which a business reports it is located--is important because the Comptroller's Office relies on that information to allocate city sales tax revenue. Verifying the accuracy of location information provides assurances to cities that they are receiving the proper amount of sales tax revenue.
Approximately $3 billion in sales tax revenue was allocated to Texas cities in fiscal year 2005. Results of a survey the State Auditor's Office sent to six cities indicated that these cities have not implemented processes to independently ensure they receive the amount of city sales tax revenue owed to them.
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