Coffee County Board of Education v. City of Tullahoma

In this case regarding the proper distribution of liquor-by-the-drink (LBD) tax proceeds between a county and a municipality within the county, the Supreme Court reversed the decision of the court of appeals reversing the judgment of the trial court granting summary judgment against the county on its claim that the liquor-by-the-drink (LBD) tax distribution statute, Tenn. Code Ann. 57-4-306, required cities to distribute the tax proceeds as the counties distribute the county property tax schools, holding that that the city was not required to share those proceeds with the county.The county in this case had not approved the LBD sales, but the city had. The Commissioner of the Tennessee Department of Revenue distributed the tax proceeds to the city. The city distributed half its tax proceeds to its own city school system. The court of appeals concluded that section 57-4-306 required the city to distribute half of its LBD tax proceeds pro rata among all schools in the county. The Supreme Court reversed, holding (1) the distribution statute directed cities to distribute half of their LBD tax proceeds for the benefit of the city's own school system; and (2) the city in this case was not required to share its LBD tax proceeds with the county or the county schools. View "Coffee County Board of Education v. City of Tullahoma" on Justia Law