THE WOODLANDS, TX (March 31, 2008) -- A new sales tax rate will go into effect in The Woodlands beginning April 1, 2008 as part of a new governance structure in the community.

Effective April 1, 2008, businesses within The Woodlands Township’s expanded boundaries in Harris and Montgomery counties will charge a one percent local sales and use tax in addition to the 6.25 percent sales tax assessed by the State of Texas. Also effective April 1, an additional one percent sales tax will be collected within Montgomery County only for the newly-created The Woodlands Township Economic Development Zone.

For business conducted inside the expanded boundaries of The Woodlands Township, as well as inside the boundaries of The Woodlands Township Economic Development Zone, the two percent total increase will raise the total sales tax rate to 8.25 percent. The additional sales tax collected will be used to fund fire protection services throughout The Woodlands.

Businesses in The Woodlands Mall outdoor expansion area, Market Street, College Park Shopping Center, and The Cynthia Woods Mitchell Pavilion had already been collecting two-cent sales tax as part of previously created Economic Development Zones of The Woodlands Township. These zones, now known as Economic Development Projects, repay the construction costs of public amenities such as Town Green Park, The Fountains at Waterway Square, and The Woodlands Mall Expansion area. With the increase of the two percent, the effective sales tax rate in The Woodlands Township is now comparable to its surrounding cities including Conroe, Shenandoah, Oak Ridge North and Houston who have been collecting 8.25 percent sales tax, the maximum rate allowed by the state.

The Woodlands Township was enlarged and reorganized after the November 2007 election when residents of The Woodlands overwhelmingly approved three propositions, one of which to extend the boundaries of the former Town Center Improvement District. In the election, voters unanimously passed three Propositions:

• Proposition 1 (Confirmation of the Addition of Territory) passed by a margin of 13,292 votes for to 2,206 votes against, or by 86%.

• Proposition II (Confirmation of Changes in the Composition of the Board of Directors) passed by 13,295 votes for to 2,172 votes against, or by 86%.

• Proposition III (The Levy of an Ad Valorem Tax) passed by a margin of 12,049 votes for to 3,419 votes against, or by 78%.

Additionally, in October 2007, The Woodlands Township Board of Directors unanimously approved Regional Participation Agreements with the City of Houston and the City of Conroe to prevent annexation of The Woodlands and permit future incorporation or adoption of a new form of local government. In return, The Woodlands Township will contribute a portion of the sales and use tax (a sixteenth of one percent) to regional participation funds established with both cities for mutually beneficial regional projects.

In February 2008, The Woodlands Township and The Community Associations of The Woodlands signed an historic agreement that will lead to consolidation of the governmental functions of The Woodlands into one entity. The Transition Agreement ultimately provides a seamless consolidation of the governmental services provided to residents of The Woodlands into a single, community-wide, governmental organization. According to the agreement, services will transition smoothly from the Community Associations of The Woodlands to The Woodlands Township in a planned manner between now and 2012.

Community Association assessments will be phased out and replaced with a Township property tax, supplemented by the new collection of sales tax, which is projected to lower overall fees paid for services by The Woodlands residents. The property tax will be tax deductible, as compared to current assessments, which are not. To aid businesses and taxpayers in understanding the rate change, a local sales tax rate map is available at www.thewoodlandstownship-tx.gov. For further information please contact Patti Graham with The Woodlands Township at 281-363-2447 or patti.graham@thewoodlandstownship-tx.gov.

Background The Woodlands, located 25 miles north of Houston, Texas, was founded as a community in 1974 and today has a population of approximately 88,000 residents.