The county will start collecting a new 5 percent tax on short-term car rentals July 1 and a new 2 percent hotel occupancy tax Aug. 1, County Attorney Mike Dixon said Tuesday.
Voters approved the venue taxes last month with 67.4 percent approval.
The county also took steps Tuesday to prepare for a $34.4 million overhaul of the Extraco Events Center grounds that the taxes will allow. Leaders from the county, the city of Waco, the Waco Independent School District and the Extraco Events Center teamed up to support the tax.
The county has formally ordered the taxes be levied, established a mechanism to collect them and created a fund where revenue will be deposited, said attorney Lauren Ferrero, with Norton Rose Fulbright.
“We’ll adopt a reimbursement resolution under federal tax law,” Ferrero told commissioners. “This allows the county to begin construction prior to the debt sale.”
County Judge Scott Felton said the orders approved at Tuesday’s meeting set up the rules to move forward with selling the bonds necessary for the projects.
“One thing is you couldn’t take the money and do something else with it,” Felton said. “It’s specific as to what you can do with it.”
The implementation dates differ because of who is setting up the taxes.
The county is working with the Texas Comptroller of Public Accounts’ office on the rental car tax, and the agency is set up to complete that work quickly, he said. Orders for the hotel tax have to be done in-house, Felton said.
The city of Waco and McLennan County will hire a third-party vendor to collect the taxes, he said.
“We’re probably going to generate $150,000 a month, maybe a little less than that,” Felton said. “The quicker we start, the quicker we start building the fund up.”
The county, city and school district have only discussed construction plans in general terms at this point. The first priority is getting the orders in place and preparing to sell bonds backed by the expected tax revenue, he said.
The plan is to implement a $10 million bond in fiscal year 2018, which starts Oct. 1, and issue more in subsequent years, he said.
Hotel tax collections will be reported on the last day of each month, and vehicle tax collections will be reported on the 20th of each month, according to county documents.