Chancellor hears tax dispute

Chancellor hears tax dispute

April 22nd, 2011 by Randall Higgins in News

CLEVELAND, Tenn.-Bradley County and Cleveland officials are waiting to learn how Chancellor Jerri Bryant will decide their dispute over distribution of local sales tax revenue.

Bryant listened to both sides for two hours Thursday, collecting more printed material along the way.

Attorneys Jim Logan, representing the county, and Douglas Johnston, representing the city, said afterward that Bryant has many pending cases before her. They couldn't guess when she might announce her decision.

Both attorneys reviewed their versions of the city and county relationship over sales taxes since a 1967 joint agreement took effect. Amendments in 1977 and 1982 related to sales tax referendums.

A focal argument for both sides is a 1996 city lawsuit to reinterpret the 1967 agreement. The agreement was upheld by the Tennessee Court of Appeals, although the appeals court later admitted making a mistake.

The current issue came up after city voters approved a half-cent sales tax increase in March 2009 to pay for capital improvements in city schools. The county declined to join the vote and make it countywide, but soon after held a separate referendum that matched the city increase.

Then the county filed a request for a court interpretation.

"There has been some misinterpretation that the county filed a lawsuit against the city to take the money," Logan said. "We did not."

The city filed a counteraction asking for a new ruling on the 1967 distribution formula.

City officials say revenue from the 2009 vote is a separate revenue source, not governed by previous agreements. The county says the money is governed by the earlier distribution formula.