Bradley County accepts appeals court's sales tax ruling

Bradley County accepts appeals court's sales tax ruling

November 8th, 2012 by Paul Leach in Local Regional News

Bradley County Commissioner Adam Lowe

Photo by Contributed Photo/Times Free Press.

CLEVELAND, Tenn. - Recent litigation over the division of sales tax revenues between Cleveland and Bradley County may be coming to an end.

Earlier this week, the Bradley County Commission voted 14-0 to approve a resolution stating that the county waives its right to apply for a rehearing of a recent Tennessee Court of Appeals ruling in the case.

"An overwhelming resonation in this community is that this needs to stop," Bradley County Commissioner Adam Lowe said. "We hear the voices of the folks in the city, we hear the voices of the folks in the county: This needs to stop."

The Appeals Court in Knoxville upheld a prior Chancery Court ruling on the legitimacy of sales tax revenue-sharing agreements between the city and county that date back to 1967.

The ruling also addressed the division of sales tax revenues in the aftermath of sales tax increases passed separately by Cleveland and Bradley County in 2009.

"[Cleveland] shall be entitled to receive the proceeds of the 2009 tax increase on sales within the city limits from July 1, 2009, through June 30, 2010," according to Appeals Court documents. The Chancery Court ruling had limited the proceeds to the 2009 fiscal year ending June 30, 2009.

If the Appeals Court had not upheld the 1967 agreement -- which allocates sales tax dollars based on city and county student populations and whether the revenue was generated within the city -- or one of that agreement's later amendments, the impact would have been several millions of dollars, according to Louie Alford, Bradley County Commission chairman.

In a news release, Bradley County Mayor D. Gary Davis said he was encouraged that the Appeals Court "again upheld our position that the division of sales tax revenue as outlined in the 1967 agreement with the City of Cleveland is correct."

Davis expressed regret about the inclusion of 2010 sales tax revenues in the ruling, though.

"This money, which was used to educate our students in Bradley County Schools, must be returned to the city," he said.

During a recent meeting between county and city leaders, Cleveland Mayor Tom Rowland said he did not want to comment on the issue until the City Council had a chance to review it.

City officials said they expect that review at Cleveland City Council meetings scheduled for Tuesday at 1 p.m. and 3 p.m. at the municipal building.

Until the litigation is put to rest, it threatens to hamper joint funding ventures involving the county and the city. Earlier this year, the Bradley County Commission passed a resolution stating its intent to withdraw from such projects "due to a potential loss in sales revenues."