A resolution calling for such a referendum was introduced at the Sullivan County Commission on Thursday night.
Sullivan County Mayor Richard Venable described it as a measure to equalize the sales tax rate countywide.
Venable had told the Times News on Wednesday the referendum would — if approved by voters in August — 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, 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 a 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.
“We’re all facing revenue shortfalls,” Venable said, “Especially in funding for our schools.”
In order to meet state rules for getting a referendum on the August ballot (see accompanying article), Venable said he has advertised a special called meeting of the Sullivan County Commission for 9 a.m. on May 15 and the requirement to give public notice of the referendum resolution will be met. The May 15 meeting will be the first of two the commission is required to hold on the topic. The second will be the already scheduled monthly meeting at 6 p.m. on May 21.