County asks court to reject appeal request
NASHVILLE — Attorneys for Scott County are requesting that the Tennessee Supreme Court reject a request by the Town of Huntsville that the court hear the town’s appeal of a lower court’s decision regarding disputed sales taxes.
In papers filed last week before the court, attorney David L. Buuck and county attorney John Beaty requested that the court deny Huntsville’s application to appeal a decision by the State Court of Appeals, which upholds a decision originally made by the State Commissioner of Revenue.
“There is no basis for this court to grant the city’s application for permission to appeal,” attorneys Buuck and Beaty wrote in the 12-page response.
At issue are local option sales taxes from businesses along a stretch of U.S. Hwy. 27 that was annexed by Huntsville in 1998. The businesses include all those along a stretch of the highway from just south of Helenwood Main Street to just south of Fill-N-Foods near New River.
At the time Huntsville originally annexed the properties, state law provided that the sales tax revenue from the local option be directed to the municipal government upon finalization of the annexation.
Three months after the Huntsville Board of Mayor & Aldermen granted final approval to the annexation, however, the Tennessee General Assembly adopted a revision in state law aimed at halting rapidly expanding municipal annexation of unincorporated business districts. The new law provided for a majority of the sales tax revenue to be directed to the county in which the businesses were located for a period of 15 years after any municipal annexation.
Meanwhile, the Town of Huntsville’s annexation of the U.S. Hwy. 27 corridor had been challenged in court. That challenge was ultimately dismissed after then-Mayor Buster Sexton was not properly served papers in connection with the lawsuit, and appeals were exhausted when the Supreme Court refused to take up arguments in the case in early 2002.
The Dept. of Revenue ruled that the town’s annexation did not take effect until after the legal challenge was exhausted in court — Jan. 7, 2002, or nearly four years after the state’s new law regarding local option sales taxes took effect. That argument has been steadfastly argued by Scott County and its attorneys.
The Town of Huntsville, meanwhile, has consistently argued that the annexation should have taken effect upon the adoption of the ordinance by the Board of Mayor & Aldermen — Feb. 16, 1998, or nearly 12 weeks before the new state law was passed.
Judgment in the legal challenges that followed the Dept. of Revenue’s decision originally went to the Town of Huntsville. However, the Court of Appeals overturned that decision, siding with Scott County, earlier this year.
Should the Supreme Court side refuse to hear arguments in the case, or side with the appeals court’s decision, Scott County will continue to receive sales taxes from the businesses within the U.S. Hwy. 27 annexation area equal to taxes it received in the 12 months prior to Jan. 7, 2002. After Jan. 7, 2017, the Town of Huntsville would be eligibile to receive those taxes.