Washington County School System By And Through The Washington County Board Of Education Et Al. v. The City Of Johnson City, Tennessee

This is one of four separate actions currently before this Court with the common issue of whether the version of Tennessee Code Annotated § 57-4-306(a)(2)(A) in effect prior to the July 2014 amendment of that statute required a municipality governed by its own liquor-by-the-drink referendum and operating its own school system to share one-half of its liquor-by-the-drink tax revenue with the county in which the municipality was located when the county had not enacted a liquor-by-the-drink referendum. The county commenced the instant action by filing a complaint requesting declaratory judgment of its asserted right to a portion of liquor-by-the-drink tax revenue collected within the municipality. The city filed a motion to dismiss the complaint, or in the alternative, for summary judgment. Following a hearing, the trial court denied the municipality’s motion for summary judgment and granted declaratory judgment to the county, declaring that the municipality was required to share with the county its liquor-by-the-drink tax monies distributed to it by the Tennessee Commissioner of Revenue (“the Commissioner”) in the manner that county property tax was expended and distributed. The trial court reserved issues of prejudgment interest and the amount of unremitted tax revenue for an evidentiary hearing. The municipality subsequently filed an unopposed motion for interlocutory appeal, which was granted, respectively, by the trial court and this Court. Determining that the municipality was not required under the applicable version of the statute to share its liquor-by-the-drink tax revenue with the county, we reverse the trial court’s grant of declaratory judgment and grant summary judgment in favor of the municipality, dismissing the county’s complaint.