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Little Elm says vendor legally permitted outside town limits; council votes to capture sales tax
Summary
Council members said a fireworks vendor set up on county land outside Little Elm’s city limits but inside a limited-purpose annexation. Town staff said they cannot revoke the county permit but will collect local sales tax under an existing agreement; council approved a consent-item procedural motion related to the matter.
The Town Council of Little Elm said a fireworks vendor that opened at the corner of Woodlake Parkway and FM 423 is located outside the town’s full limits but within a limited-purpose annexation, and the town has no permitting authority over the site.
Jeanette Espinosa, a town staff member, told the council that Denton County issued the permit and that the town did not approve the location. “We did not. We didn't know about it till the stand went up,” Espinosa said. She said the town reached out to the permit holder, who had a lease with the landowner and said he had not realized local sales tax rules applied.
The town emphasized it cannot order the vendor removed because the county permitted the use under state law. Espinosa said the town’s remaining authority is to collect a local 2 percent sales tax under Ordinance 944 and a strategic partnership agreement with the water district.
Mayor (name not specified) and council members said the town is working with Denton County to explore options but that state law limits the county’s ability to deny permits that meet statutory standards. Council members raised concerns about traffic, parking and safety around the site and said they are coordinating with the county, police and fire to monitor impacts.
The council approved a procedural consent motion related to the item after removing it from the consent agenda for discussion earlier in the meeting.
Officials said the town’s strategic partnership agreement with the water district provided that the town would receive 100 percent of the sales tax on the property after an initial split period and that the town expects to receive the sales tax through the comptroller’s office if collections are made. Staff estimated that a single high-volume sales period could generate substantial revenue but did not provide a specific projected dollar figure for this location.
Council members said the town will continue outreach to the county and neighboring property owners to minimize safety and access problems but reiterated it lacks permitting authority for the site and therefore cannot ban the business from operating there.
