Learn more about what the City of Round Rock's sales tax does for you
Round Rock's dedicated half cent sales tax for property tax reduction keeps the City's property taxes low. Without this dedicated sales tax, property taxes today would be 19 cents higher.
When Round Rock residents Shop the Rock, they put the Hardest Working Sales Tax in Texas to work right here at home.
Sales tax is one of the most important sources of revenue to state and local governments. Unlike most cities, which get most of their operating revenue from property taxes, Round Rock gets most of its funds from sales tax revenue.
Round Rock collects so much in sales taxes largely because of the presence of Dell. Since Dell made Round Rock its corporate headquarters in 1994, the sales tax for Dell products sold in Texas online or in a catalogue goes to the City.
Sales tax basics In Texas, the State has a sales tax of 6.25 percent. The City of Round Rock has an additional sales tax of 2 percent for a combined sales tax rate of 8.25 percent. That means that 8.25 cents are collected per dollar spent. Two of those cents go directly to the City of Round Rock.
Citizens of Round Rock should be interested in just how those two cents are spent: funding city projects and services and keeping the City's property taxes among the lowest in Central Texas.
Without a percentage of sales tax dedicated to property tax reduction, the annual taxes on an average value home in Round Rock would be $335 more.
Property tax reduction In 1987, the Round Rock City Council decided that a half-cent would be used for property tax reduction. This revenue allows the City to reduce its reliance on property tax revenue to pay for operations and debt obligations.
Without this dedicated half-cent sales tax, the City's property tax rate in fiscal year 2013 would be 19 cents higher than it is today. That means that for a home valued at $174,210 (the average value of a home in Round Rock), property taxes without the dedicated sales tax would be $1,067 instead of $732. That's a difference of $335.
Transportation and economic development Another half-cent of the City's sales tax revenue is used for transportation projects and economic development activities.
Voters approved this dedicated sales tax in 1997. Since then, the City has leveraged $173 million in tax revenue into $535 million worth of projects. Currently, the City of Round Rock is implementing a $58 million, 5-year program to address traffic needs with a comprehensive set of projects.
Current transporation projects in Round Rock
General fund One percent of the City's sales tax revenue goes to its general fund, which pays for basic government services like police, fire protection, parks, and the library. These services help make Round Rock a safe, thriving, enjoyable community.
So Shop the Rock... When you shop in Round Rock, you contribute to improving the city you live in. So put the hardest working sales tax in Texas to work for you!