On Wednesday, Sullivan County Mayor Richard Venable told the Times News a resolution calling for such a referendum could be presented to the Sullivan County Commission Thursday night.
Venable described it as a measure to equalize the sales tax rate countywide, saying it would — if approved by voters in August — increase the local sales tax rate to 9.75% across the county. Currently the rate is 9.5% inside the city of Kingsport, 9.25% inside the city of Bristol, and 9.25% in unincorporated areas. That means if voters approve going to 9.75% countywide (which means 9.75 cents of sales tax per dollar spent on most items), the increase would equal a half-cent per $1 spent in Bristol and non-city portions of the county (50 cents on a $100 purchase) and a quarter-cent per $1 spent inside Kingsport (25 cents on a $100 purchase).
Venable said in his preliminary discussions with city officials he has received supportive feedback from Kingsport.
According to the taxpayer-funded County Technical Assistance Service at the University of Tennessee:
• Under state law, when a county and city have the same local option sales tax rate, revenue is split under the same manner as the county property tax for school purposes.
• But when a city has a higher rate, such as Kingsport currently having the quarter-cent higher rate of 9.5 compared to the county’s 9.25, the first half of the extra revenue is not earmarked for education, so the city does not have to share the revenue from the quarter-cent extra with the school systems.
• Revenue from local option sales tax levied by counties is distributed as follows: 50% specifically for education, to be distributed in the same manner as the county property tax for school purposes; 50% distributed on the basis of where the sale occurred. Taxes collected inside a municipality are distributed to that municipality, and taxes collected in unincorporated areas are distributed to the county. Counties and cities may contract with each other for distribution of the half not allocated to school purposes.
Venable said that if the county were to increase the tax rate to 9.75% in only the non-city portions, it would cost Kingsport about $1.3 million. On the flip side, if the tax rate is increased countywide, it will provide new revenue for all the school systems (Sullivan County, Kingsport City, and Bristol City). And schools will likely be in need of new revenue to replace that lost due to the as-yet-unknown impact of the economic shutdown caused by COVID-19, Venable said.
To get a referendum on the August ballot, a request must be submitted at least 75 days before Election Day (Aug. 6), Venable said.
The Sullivan County Commission is scheduled to meet at 6 p.m. on the second floor of the historic Sullivan County Courthouse. The meeting is a “catch up,” serving as the group’s postponed April meeting. A regular monthly meeting for this month is scheduled for 6 p.m. on May 21.
As of Wednesday evening, the meeting’s agenda did not include a resolution regarding a sales tax referendum. Venable said it didn’t have a sponsor as of Wednesday afternoon.
In-person public access to tonight’s commission meeting will be limited, according to procedures for conducting the meeting sent to county officials and media representatives by Venable’s office. Those are:
1) This meeting will be conducted via traditional and electronic means as permitted by Gov. Lee’s Executive Order 22, Section 5 and social distancing protocols identified by the CDC.
2) Please follow all good hygiene procedures including wearing a mask and using hand sanitizer. Your desks and designated seating areas will be sanitized prior to your arrival.
3) There will be no audience allowed in the Commission Room. The sergeant in arms will allow only authorized staff, county commissioners, and media in the Commission Room. Officials, department heads and staff usually in attendance are asked to view the meeting electronically.
4) No one will be allowed into the Commission Room without a mask. We have masks available for your use.
5) All votes will be roll call votes.
6) Any members of the public wishing to make comment during the meeting will wait outside the room until called to address the Commission.
7) All in attendance are asked to practice social distancing protocols. Please do not congregate in the Commission Room and/or outside the courthouse. Upon adjournment, please leave the Commission Room promptly.