Beaty: Board would like to discuss tax issue
by JOYANNA LOVE Banner Senior Staff Writer
Dec 31, 2013 | 912 views | 0 0 comments | 15 15 recommendations | email to a friend | print

Confusion seems to be surrounding the issue of how the local portion of liquor by the drink taxes has been distributed by the city of Cleveland.

The Cleveland City Council has gone on record maintaining that information it has received from state government representatives says the city has complied with the law.

Councilmen are asking for the Bradley County Commission and the Bradley County Board of Education to outline their information on why they believe the city owes the county schools money.

Bradley County Board of Education chairwoman Vicki Beaty said she plans to call a meeting of the school board for next week to discuss how the board will move forward. A final date for the meeting has not been set.

“Most board members would just like to sit down with the City Council and discuss this issue,” Beaty said.

She said local governing bodies need to work together to work through the confusion.

“We are willing to work with the city,” Beaty said.

Beaty said she would like the board to discuss the issue with Bradley County Schools Director Johnny McDaniel and attorney James Logan. Logan is working with the county government and the school system on this issue.

At a previous meeting, the school board had passed a resolution stating it believed the city government did owe the county school system money from liquor by the drink taxes.

Logan has stated the amount adds up to more than $700,000, based on information from the County Technical Assistance Service.

Beaty said it had been the board’s understanding at its last meeting that it needed “to respond in some way” in order to possibly recover any revenue that reportedly had been due from the Cleveland portion of the local tax.

The school system has selected Logan to represent it in discussions with the city of Cleveland.

The Bradley County Commission passed a resolution during it Dec. 16 meeting asking the city to “pay over to the Bradley County School System all funds from the consumption of alcoholic beverages on the premises taxes.”

While Commission Chairman Louie Alford said the Commission would support the school board as it moved forward in discussions with the city, he did not foresee the issue coming up at its first meeting in January.

Alford said the issue is between the city government and the county school board.

“The county wouldn’t get any of the money anyway,” Alford said.

During a recent meeting of the County Commission, Logan said the county owed the Bradley County Schools system about $30,000. No action was taken on this statement.

“I think there has been a lot of misunderstanding statewide,” Beaty said.

She mentioned the need for clarification at the state level, since many counties in Tennessee are facing similar dilemmas.

The Cleveland Daily Banner contacted the Tennessee Department of Revenue for clarification of the law. The response from a department spokesmanpointed the Banner to a posting on the department’s website addressing the statewide issue.

The department declined to answer specific questions, saying the department does not have any oversight.

“Since the Department of Revenue has no oversight over local government finances and how liquor by the drink tax revenues are distributed after the department disburses them to local governments, we would prefer not to comment on the record,” said an email to the Banner from Kelly Nolan Cortesi, director of communications for the Tennessee Department of Revenue.

A 15 percent tax is charged on mixed drinks (liquor by the drink) in Cleveland and Bradley County. This revenue goes to Nashville, where half of it is put into the state budget for education. The other half is returned to the local government in which it is collected.

Tennessee Code annotated dictates that a portion of the local revenue be used for the local school system. Confusion has arisen locally as the county, based on information from Logan, has stated the city owes Bradley County Schools a portion of its liquor tax revenue based on T.C.A. 57-4-306 2A.

City officials have been in contact with the Department of Revenue and have been told they are in compliance with the law.