Attorneys argue Johnson City liquor tax lawsuit

JOHNSON CITY, Tenn. (AP) – Second Judicial District Chancellor E.G. Moody says he may need several weeks to render an opinion in a lawsuit by the Washington County Board of Education which claims it is owed $3.4 million by Johnson City from prior liquor-by-the-drink sales tax revenues.

The Johnson City Press reports attorneys presented arguments at a Tuesday hearing.

Johnson City attorney Erick Herrin argued that according to a state statute, cities without their own school systems must share liquor-by-the-drink tax revenues with counties. Johnson City has a school system.

Herrin cited the Tennessee Constitution, saying municipalities which collect liquor-by-the-drink tax revenues can spend the proceeds only for municipal purposes.

Attorney James Logan, who is representing Washington County, said the state collects all taxes and keeps half. The other half is sent back to local political subdivisions. That portion can be split again, with half the amount going to local schools.