At issue: Comptroller Glenn Hager in January proposed a rule change that could cost the city of Round Rock at least $20 million in annual sales tax revenue.
Hager’s proposal would redistribute sales tax collected on internet purchases by routing tax revenue to the purchaser’s city rather than to the city where the online sale is received by the business. For Round Rock, home of Dell Technologies, a business that receives and fulfills billions of dollars of internet orders every year, the loss in sales tax revenue is projected to be detrimental to the city’s budget.
“The rule would potentially have a very adverse impact on the city of Round Rock and, we believe, the state of Texas in general,” Round Rock City Attorney Steve Sheets said.
Sheets said the city submitted comments to the comptroller’s office April 3. Hegar’s office is expected to respond to all comments received during the public comment period sometime next week, Sheets said.
“Just in case the rule doesn’t go our way, we needed to be ready,” Sheets said. “We are engaging Ms. Bourland to assist in providing the legal services that might be necessary. It’s possible that the comptroller will do what we asked him to do, and we won’t need to do anything. But it’s also possible that he won’t.”
The firm’s agreement with the city states that services could include “consultation and representation regarding proposed rule changes by the comptroller relating to local sales tax.”
“It’s my honor to be able to represent the city of Round Rock,” Cindy Bourland said during council's April 23 meeting. “I’m happy to assist the city and city attorney as needed. Hopefully, this matter with the comptroller can be resolved promptly.”
Bourland said she is a fifth-generation native of Round Rock who has been in private law practice for 22 years. She charges an hourly rate of $475 and will serve as the lead attorney in matters between the city and the comptroller, per the agreement. Legal fees for the firm’s work are not to exceed $150,000 unless the city approves a higher amount in advance, the letter states.
“Please understand that given the scope of this matter and the potential for legal proceedings that [might] take a substantial amount of time, including the possibility of filings in district court and related appeals, it is certainly possible that legal fees could reach or exceed that cap,” Bourland said in the letter. “It is impossible for me to predict now how long the city might need my representation in this matter, and consequently, I am unable to make an estimate of total legal fees at this juncture.”