Sales tax from the 2009 increase will go to the government jurisdiction where the tax is collected, and the rest of the local sales tax will be divided based on a 1967 agreement.

This was the decision clarified in a court order issued by Chancellor Jerri Bryant in response to the motion for amendment to the summary judgment issued in August 2011.

The city will not be entitled to back sales taxes from previous years, and no money already given to Bradley County Schools will be affected, according to attorney Jimmy Logan.

“All the revenue which has been waiting final decision is all that is in question under this decision,” Logan said.

According to state law, the first 50 percent of any local sales tax collected must be given to the local school systems. The other half is what has been held by the Bradley County Trustee’s office until the dispute was settled.

Logan gave the Bradley County Commission an update on the legal proceedings during its meeting Monday.

The court order he presented amends the previous summary judgment to make the first day the city could collect its own tax “... July 1, 2009, instead of June 30, 2010.”

The city of Cleveland will receive all of the disputed sales tax being held, per a previous agreement by the Commission.

The order also establishes that the city of Cleveland is not entitled to any additional sales tax in connection with the 1982 increase.

Logan reminded the commissioners the county did not sue the city, but asked for a question to be answered.

“The question was, ‘Under the 2009 sales tax increase would we do business and continue to do business as we had done since 1967?’” Logan said.

Previous sales tax collection was called into question when the city filed its own legal action.

Bryant heard the dispute on Dec. 9, 2011, and issued the most recent order on Feb. 28, 2012. If the city does not appeal this decision the sales tax dispute is settled. Logan said the city would have 30 days to file an appeal.

The dispute over the 2009 increase from 2.25 percent to 2.75 percent in local sales tax began when Bradley County held a sales tax referendum after originally voting not to. Having the same increase in both local jurisdictions enacted at different times set how much of the revenue each government should receive.

Under the 1967 agreement, two-thirds of the sales tax collected in the city goes to the city government. The remaining one-third is given to the county government. Bradley County established at the time of the 2009 county-only referendum that money from the tax increase would be used for education and capital projects. Money from this increase, in addition to funds the school system had saved throughout the years, made the Fine Arts Building at Bradley Central High School a reality.

The order will be presented to the City Council Monday.