The majority of funding for local governments comes from property taxes and sales tax. Property taxes are collected by a number of entities, with the City, County, and School District being the primary drivers. In addition, there are a number of special districts that collect taxes in all or part of the County. These districts provide specific services and collect taxes to be used within that district’s boundaries on approved projects. Table 11 provides an overview of the taxing districts and the basic rate. Specific information on exemptions, etc. can be found at the County Appraisal website.
The Sales Tax in Bay City is the State maximum of 8.25 percent. Of this, 6.25 percent goes to the State of Texas, 1.0 percent goes to the City, 0.5 percent is for property tax relief, and 0.5 percent is for economic development.
The economic downturn of 2008 resulted in a significant drop in gross sales and sales tax collection in Bay City. While there has been a rebound in the gross sales, the level of sales subject to sales tax has not returned to the same level as in 2008. As the City continues to rebound and see more retail and service growth, this revenue will continue to increase and return to the levels seen prior to the recession.
2013 Property Tax Rates
0.56794% - City of Bay City
0.32099% - Matagorda County
1.32394% - Bay City ISD
1.0400% - Boling ISD
1.16373% - Matagorda ISD
1.1000% - Palacios ISD
1.2176% - Tidehaven ISD
1.0400% - Van Vleck ISD
0.2560% - Matagorda County Hospital District
0.03645% - Port of Bay City Authority
0.03872% - Matagorda County Nav District #1
0.00522% - Matagorda County Consv. & Recl. District
Hotel and Motel Taxes
Hotels, motels, and bed and breakfast establishments are levied a Hotel / Motel tax. This tax is intended to be used on projects that will put ‘heads in beds’, which means projects need to promote tourism in the community. This can include marketing, festivals and events, and similar projects. In the fourth quarter of 2013, Bay City had 20 properties reporting for the Hotel / Motel tax, totaling 837 rooms and $1,774.297.84 in taxable receipts. Bay City hotels and motels are full, and many of their occupants are long term. Companies are renting blocks of rooms for employees to be in the area for extended periods of time.