Session December 6, 2017
from the Chancery Court for Coffee County No. 2014-CV-179
Vanessa Jackson, Judge
a controversy between the City of Tullahoma and Coffee County
about the proper distribution of a portion of liquor by the
drink revenues collected in Tullahoma. The trial court ruled
that the distribution provisions of Tenn. Code Ann. §
57-4-306(2)(A) were not effective in Coffee County and that
the statute was ambiguous. The trial court resorted to the
legislative history to determine that Tullahoma should keep
the funds addressed in Tenn. Code Ann. § 57-4-306(2)(A).
We do not find the statutory language ambiguous and reverse
the decision of the trial court.
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
J. Burch, Manchester, Tennessee, for the appellant, Coffee
County Board of Education.
E. McGrady and Kristin Berexa, Nashville, Tennessee, for the
appellee, City of Tullahoma.
D. Bennett, J., delivered the opinion of the Court, in which
Frank G. Clement, Jr., P.J., M.S., and W. Neal McBrayer, J.,
D. BENNETT, JUDGE
Code Annotated, Title 57, Chapter 4 addresses the consumption
of alcoholic beverages on premises, commonly known as liquor
by the drink. Chapter 4 is "effective in any
jurisdiction which authorizes the sale of alcoholic beverages
for consumption on the premises in a referendum." Tenn.
Code Ann. § 57-4-103(a)(1). A tax of fifteen percent
(15%) of the sales price of all alcoholic beverages sold for
consumption on the premises is assessed. Tenn. Code Ann.
§ 57-4-301(c). The tax is collected by the retailer from
the consumer and forwarded to the commissioner of revenue.
Tenn. Code Ann. § 57-4-302(1). The commissioner
distributes the taxes as follows:
(1) Fifty percent (50%) to the general fund to be earmarked
for education purposes; and
(2) Fifty percent (50%) to the local political subdivision as
(A) One half (½) of the proceeds shall be expended and
distributed in the same manner as the county property tax for
schools is expended and distributed; provided, however, that
except in counties having a population of not less than
twenty-seven thousand nine hundred (27, 900) nor more than
twenty-seven thousand nine hundred twenty (27, 920),
according to the 1980 federal census or any subsequent
federal census, any proceeds expended and distributed to
municipalities which do not operate their own school systems
separate from the county are required to remit one half
(½) of their proceeds of the gross receipts
liquor-by-the-drink tax to the county school fund; and
(B) The other one half (½) shall be distributed as
(i) Collections of gross receipts collected in unincorporated
areas, to the ...