Sullivan sales tax referendum looking DOA

J. H. Osborne • May 16, 2020 at 9:30 AM

BLOUNTVILLE — The chances for a referendum in August to equalize the local option sales tax to 2.75% countywide in Sullivan County weren’t looking good Friday morning. The Sullivan County Commission held a called meeting for what was envisioned by proponents as a simple introduction of a resolution to put the issue to voters on the August ballot.

County Mayor Richard Venable said it turns out the meeting to simply introduce and discuss the proposal wouldn’t help meet state requirements to get the referendum on the August ballot. State law, Venable said, mandates that the commission not just meet on the topic twice, with a single vote, but instead requires the commission to meet twice and vote twice to adopt the resolution seeking to get the measure on the ballot.

Venable said that judging from the reception the resolution got from commissioners on Friday, it’s questionable whether the issue even needs to be pursued further at this point. It does remain on the commission’s agenda for the group’s monthly meeting on Thursday. Venable said if there had been an obvious amount of the necessary support (13 votes in favor) to get the resolution approved, the commission could have held another called meeting next Friday. But Venable said his office chose not to advertise such a meeting.

Several commissioners who spoke during the meeting Friday morning, as well as others who have posted on social media about the issue, said they won’t support any kind of tax increase under the current economic situation the county’s taxpayers are facing — to the point that even a vote to allow those taxpayers to make the decision through the proposed referendum would not have their support.

If the referendum ever makes it to the voting booth, and it were to be approved by a majority of voters countywide, it would increase the local option sales tax rate to 2.75% across the county (for a total sales tax of 9.75%, including the state’s 7% sales tax). Currently, the sales tax rate (including the state’s 7%) is 9.5% inside the city of Kingsport and 9.25% inside the cities of Bristol and Bluff City and in non-incorporated areas of the county. The rate also is 9.25% inside the portion of Johnson City that is within Sullivan County.

That means if voters approve going to 9.75% countywide, which means 9.75 cents of sales tax per dollar spent on most items (groceries are taxed at a lower rate), the increase would equal one half-cent per $1 spent in Bristol, Bluff City, Johnson City 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).

According to state records, the 2.25% local option sales tax rate has been effect in Sullivan County, Bristol, Bluff City and the portion of Johnson City in the county since 1989, and the 2.5% rate has been in effect in Kingsport since 1992.

The local option sales tax rate already is 2.75% in these nearby counties: Carter, Hawkins, Greene and Unicoi. In Washington County, the rate is 2.5%

Venable told commissioners he has discussed the idea with city officials in Kingsport and Bristol and has yet to have any say they won’t support it.

Governments everywhere are expecting a drop in sales tax and other business-related revenues due to the economic shutdown caused by the COVID-19 pandemic. And it is no different locally.

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