Page 48 - Forest Hill FY22 Annual Budget

For the fiscal year 2019-2020, the property tax levy will amount to approximately $6,183,985 a
decrease of 1.08% of the previous fiscal year's tax levy amount of $6,251,242

I Sales Tax

Sales tax collections are based on economic activity and va1y with changes in the local economy.
Estimated FY 2021-2022 collections (in the General Fund) of $1.850,000 are consistent with current
year's collections of $1.7M adjusted for increases due to changing tax laws and the State of Texas audits
and monitoring of internet businesses. The local sales tax rate is 8.25%. Businesses within the city limits
collect the tax and remit the tax to the State of Texas Comptroller. Of the 8.25%, 6.25% is retained by the
State of Texas. The division of the 1.75 % City of Forest Hill Sales Tax is shown below by Fund.

The City of Forest Hill has a Sales Tax Rate of 8.25%. The rate is composed of the following components:

State of Texas 6.25 %
City of Forest Hill 1.75%
Special Libra1y Rate 0.25%
Total 8.25%

For the 1.75% that the City receives, it is broken out as follows:

General Fund 1.00%
Community Development 0.50%
Street Improvement 0.25%
Total .L1i

Franchise Fees

The City of Forest Hill receives franchise fee payments for the use of its streets and right-of­
ways. Companies involved in sanitation, telecommunications, and utilities must pay the City for the use
of its streets and right-of-ways. Franchise fees are a significant source of income for the City, amounting
to an estimated $550,000 per year for the last several years. Due to legislation that was enacted to take
effect January 1, 2021 . cable companies now will pay significantly less to Texas municipalities for
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fanchise fees. Although the full effects of the legislation is not yet known, the City is estimating
franchise fees will drop to $490,000.

Hotel / Motel Tax

Motel taxes are 13% (6% State of Texas and 7% City of Forest Hill) of the cost of the stay. The taxes are

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