Tennessee’s highest court ruled Wednesday that cities with their own school systems do not have to share liquor tax proceeds with counties.
Revenue generated by the state’s 15% tax on liquor-by-the-drink goes to the Commissioner of Revenue, who keeps half of it and sends the other half back to the city or county. Those funds go toward education.
Five counties, including Sullivan and Washington, filed five separate lawsuits in 2014 arguing that state law required cities to share that revenue with counties.
Wednesday, the Tennessee Supreme Court ruled in favor of the cities.