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Bill

SB 2747

Relating to limitations applicable to certain agreements providing for a rebate of municipal sales and use taxes or a grant or loan based on those taxes.

89th Legislature (2025) Introduced by Angela Paxton and 1 co-sponsor

SB 2747 restricts how Texas municipalities can use sales tax revenues for business incentive rebates, grants, and loans, limiting local economic development negotiating power.

Placed on General State Calendar
#business&commerce--general(i0050) #comptrollerofpublicaccounts(v2608) #taxation--sales(i0800)
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WeVote Research Nonpartisan
Bill Summary · SB 2747

Legislative bill overview

SB 2747 establishes limitations on municipal agreements that provide tax rebates or grant/loan programs funded by municipal sales and use tax revenues. The bill constrains how Texas cities can structure economic incentive agreements, likely imposing restrictions on duration, amount, or eligibility requirements for such tax-based incentives.

Why is this important

Municipal sales tax rebates and grants are primary tools cities use to attract business investment and economic development. This bill could significantly limit cities' flexibility in negotiating competitive incentive packages, potentially affecting their ability to recruit companies and retain existing businesses—or conversely, could prevent inefficient or inequitable use of public tax revenue.

Potential points of contention

  • Local control vs. state oversight: Cities may view restrictions as state overreach limiting their economic development authority; supporters may argue state oversight prevents wasteful tax giveaways
  • Competitive disadvantage: Restrictions could disadvantage Texas municipalities competing with other states/cities for major corporate investments if neighboring jurisdictions retain more flexibility
  • Business recruitment impact: Unclear whether limitations would harm economic development or prevent questionable incentive deals; depends entirely on what restrictions the bill imposes

Compiled from official sources — confirm details with the bill’s official record.

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