Amarillo and Potter County begin talks on sales-tax revenue‑sharing for annexed areas

City of Amarillo staff presented a draft revenue‑sharing agreement to the Potter County Commissioners Court to share sales tax proceeds from areas annexed by the city since 2017 and now inside the county assistance district (CAD). Andrew, the city planner, said the proposal would let the city and county partner on retail development by sharing future sales tax revenue generated after annexation.

The city described approximately 1,400 acres across four annexations as potential candidates for sharing and said sales tax would be attributable when development produces retail activity. "We'd be sharing in these red boxes any future ... retail taxes," Andrew said, emphasizing that city utilities and services are often prerequisites for attracting large commercial tenants. He also described the legal basis as chapter 387 of the Texas Local Government Code and noted the city uses tax‑tracking software (Zactax) to analyze sales‑tax sources.

Potter County’s fiscal officer responded with several operational concerns, starting with data ownership and administrative burden. The officer said county staff do not currently collect the transactional sales‑tax data and would either need new software or an amendment to make the city or a third party provide monthly allocations. "This data is not the county's data," he said, warning that calculating remittances and assessing penalties without clear access to comptroller data would create internal control problems.

Commissioners explored phased sharing and case‑by‑case approaches. One commissioner proposed negotiating deals for individual projects rather than broad geographic splits; another suggested a stepped share (for example 70/30 initially, phasing to 50/50) to allow the county to adjust budgets. Several commissioners asked for a joint technical meeting with city staff, the county's fiscal team and fire and public‑safety representatives to map annexed boundaries, model potential revenue impacts and consider software options.

The city said some of the annexed boxes are undeveloped and currently yield no sales tax; the benefit to both parties lies in sharing taxes from future development. The court did not adopt a resolution; instead, members asked staff to pursue follow‑up negotiations and technical analysis before any formal agreement. "Let's sit down and talk," the judge said, and the court scheduled further discussion with city staff and county department leads.

Authorities referenced in the presentation included chapter 387 of the Texas Local Government Code as the statute enabling CADs and intergovernmental revenue sharing. The court requested more detail on the geographic boundary, potential revenue scenarios, software options, and the administrative steps that would be needed if the county were to participate.