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Sales Tax

Sales tax is the second-largest operational revenue source for the City of Colleyville governmental funds, spanning three
key funds: the General Fund, Colleyville Crime Control and Prevention District (CCCPD ), and the Colleyville Economic
Development Corporation (CEDC). The State of Texas allows cities to levy a maximum sales tax of 2 % on top of the state's
6 . 25% sales tax. In Colleyville, the General Fund receives 1% of the local sales tax, while CCCPD and CEDC each receive 0.5% .

Sales tax revenue in the General Fund is allocated towards essential city ser vices, including public safety, public works, and
leisure ser vices. The CCCPD's por tion is dedicated to police operational and capital expenses, ensuring the safety and
security of our community. The CEDC's share suppor ts eligible economic development and leisure ser vices, such as parks
and libraries, enhancing the quality of life for Colleyville residents.

Over the past few years, sales tax has become a more substantial source of revenue, with signi{cant growth obser ved
during and following the COVID -19 pandemic . However, we are now seeing a leveling out of this growth. While increased
sales tax revenue is bene{cial and more is always welcome, it is also more susceptible to economic |uctuations. This
volatility underscores the impor tance of Colleyville’s strong proper ty tax base, which provides a stable and reliable source
of revenue to suppor t the City's operations even during economic downturns.

It is impor tant to note that this revenue {gure also includes mixed beverage sales tax, which is separately remitted to the
City by the Texas Comptroller and is allocated entirely to the General Fund, though it represents an inconsequential
amount .

Sales tax revenue is a signi{cant source of income for the City of Colleyville. For Fiscal Year 2026 , the sales tax revenue has
been budgeted based on a |at projection, in line with the trend we have been obser ving in recent years. This conser vative
approach re|ects a stable local economy and consistent consumer spending patterns.

While external factors such as changes in the broader economy or new retail developments could impact sales tax
collections, our trend analysis indicates that a |at projection is a prudent estimate for the upcoming year. By maintaining
this approach, the City ensures that revenue estimates are realistic and aligned with current economic conditions,
allowing for effective budgeting and {nancial planning.

Sales Tax Revenues by Fund
$15M

$ 1 1 1 1 M
M
$11M
$
$11M
M
$
$ 1 1 1 1 M

$

$11M
M
1
1
1
$
1
$
M
M
$ 1 1 1 1 M $11M
$
$ 1 1 0 M
M
0
$10M
$10M
$
$
$8M
8
M
M
8
$5M
0
FY2021 FY2022 FY2023 FY2024 FY2025 FY2026
General Fund Colleyville Economic Development Corporation Fund Crime Control & Prevention District Fund
FY 2025-2026 Annual Budget | Colleyville Page 89