NACOGDOCHES, TX (KTRE) - The sales tax in designated areas of Nacogdoches County could go up if affected voters approve funding for a County Assistance District. East Texas News looked into what a CAD is and why it would lead to higher a sales tax in some parts of Nacogdoches County.
Right now, customers buying items from retailers located outside of any city or town in Nacogdoches County pay a 7.2 percent sales tax. That's a percentage point lower than what's collected by retailers within municipalities of Nacogdoches County.
"The city gets one and the hospital district gets one percent, so outside the city the hospital district gets one percent and the others not being collected," said Nacogdoches County Judge Mike Perry.
On the ballot Nacogdoches County voters living outside any city are asked to approve an additional 1 percent in sales tax. Judge Perry has an idea how people who don't understand the higher tax rate request would vote.
"An automatic no," Perry said.
So during these last few days before the November 3 election, Perry and commissioners are explaining how the additional sales tax revenue would fund a County Assistance District, or a CAD.
"There's some real strict regulations about what the 1 percent can be used for," said Elton Milstead, the Precinct 4 County Commissioner.
Catching commissioners' attention is the revenue can be used for the construction, maintenance, or improvements of county roads.
"We need the help on the roads," Milstead said. "We're continually fighting a losing battle on those."
"We'll spend it wisely, and we'll be able to maybe to buy some material that we need for the roads," Perry said.
Revenue can also be used in other areas.
"It could be used for law enforcement and detention services, such as a jail," Milstead said.
In addition, the revenue can go toward fire prevention, recreational facilities, and economic development."
The question with no clear answer is can a 1 percent sales tax collected from businesses in rural areas generate a significant revenue amount?
"We're not even sure what it will generate," Perry said.
"It's a real variation," Milstead said. "We went all way from $250,000 to $500,000 to $600,000."
"It's just according to how much money people spend that are in that County Assistance District," Perry said.
Most consumers are accustomed to the 8.25 percent sales tax found in the high retail district of Nacogdoches. It will be voters living outside municipalities who will determine if they and all other consumers will pay the same price.
Perry recently sent out letters explaining to affected voters the County Assistance District, but most arrived after early voting began.