Time To Pay The Tab

The Tennessee Attorney General recently released an Opinion that could add a little economic boost to the Jefferson County School System. Opinion Number 14-22 answers questions associated with revenue from the mixed drink tax. According to State of Tennessee statute, 50% of the mixed drink tax is returned to the municipality or county of origin, where it is split equally with the local school system. If the municipality operates its own school, then that school is the recipient of the tax. In cases like Dandridge, Jefferson City and Baneberry the tax split is with the Jefferson County Department of Education.

Jefferson County Finance Director Helton informed the School Board that the Department of Education has not been receiving mixed drink tax revenue from the City of Dandridge. According to records provided from the Tennessee Department of Revenue, Dandridge, Jefferson City and Baneberry all pay mixed drink tax but the Jefferson County Department of Education is only receiving their cut from Jefferson City.

The State Attorney General offered an Opinion that the local School Board cannot wavier the mixed drink tax because it is mandated by statute and there is no limitation on back collections. However, there is no provision for accrual of interest on unpaid revenue.

Dandridge is the largest producer of mix drink tax revenue in Jefferson County, followed by Baneberry and Jefferson City. Tax records indicate that the Jefferson County Department of Education is currently owed around $50,000 in back mixed drink taxes. Though statute does not allow the School Board to forgive the back taxes, it does provide that they could accept payments for the undistributed mixed drink tax to allow large tax amounts to be spread over time. Uncollected taxes from Dandridge date back to the 2006-2007 fiscal year and Baneberry extends beyond that date.