Page 33 - CityofSouthlakeFY26AdoptedBudget

Figure 9
Assessed vs. Taxable Value - Average Home & Property
Budget Overview
Tax Bill - Historical

Sales taxes are an important source of revenue for the City, making up approximately 29% of total
revenues. It is estimated that non-residents that shop and dine in Southlake generate up to 70% of
the sales tax revenue. Why is this important? This means that “imported taxpayers” visiting the City
are supporting a large portion of the bill for important infrastructure and services that these funds
provide. These monies are used to support the City’s general operations, fund parks development, crime
prevention and safety initiatives, construction and operations of The Marq Southlake, and economic
development, as well as pay off the debt for these funds. Utilizing special sales tax districts has allowed
the City of Southlake to maintain an excellent financial condition and reduce the property tax burden.
In FY 2026, about 28% of the total debt service will be repaid using sales taxes collected for special
districts.

For FY 2026, sales tax revenues for all funds (General Fund, SPDC, CEDC and CCPD) are projected to be
$45,163,040, which is $1,423,356 million, or 3.3% more than the prior year adopted budget. This growth
as calculated can be attributed to conservative budget projections in FY 2025 due to flat collection
trends at the time of budget preparation. When compared to actual, estimated collections in FY 2025,
the FY 2026 projection for sales tax revenue growth is approximately 1.5%.

Figure 10 shows the sales tax collection trend since 2021.
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Hotel Occupancy Tax Revenues
The Hotel Occupancy Tax is authorized under the Texas Tax Code, Chapter 351. The City of Southlake
adopted Ordinance No. 769 in February 2000, levying a 7% tax on room receipts. The tax on hotel
rooms is providing the revenues to the City in this category. For FY 2026, the tax is anticipated to

FY 2026 City of Southlake | Budget Book 33