The City of Chattanooga will have to pay the county for collecting its sales taxes, Trustee Bill Hullander said today.
Hullander made a passing reference to the issue at this morning's budget hearings, but told the Times Free Press today he intends to charge the city a 2 percent commission on the sales tax it collects. It will cost the city $1 million a year, he said.
Under the sales tax agreement, a revenue-sharing agreement between the city and county, the county did this for free. But that agreement expires later this month.
"Other counties, they get paid a commission for handling the sales tax," Hullander said. "That was part of the agreement that the county will not charge the city. If this agreement goes away, that opens me back up to having to follow the state law."
Hullander said whatever part of the money his office does not keep for operational expenses would be turned over to the county.
Chattanooga Mayor Ron Littlefield said this additional revenue should allow the county to be able "to fund more of those agencies that they have indicated that they cannot afford to financially support. Surely, operations like the health department that stand to offer a net savings of public resources should now be off the chopping block."