October 3, 2018
By Jill Penley
Anyone not planning to vote in November’s state and federal general election should know the ballot will include two referendums that will affect every Johnson County resident. One involves the sale of alcohol locally and the other increases the local sales tax rate. While petitions have been noticed in some local restaurants and businesses the past few months, the person, or persons, initiating the petition distribution remains very “hush-hush.” State law directs the county election commission to include the referendum question upon receipt of petition with at least as many valid signatures as would equal 10 percent of their residents who voted in the last gubernatorial election which would be 337 signatures, and evidently enough certified signatures were garnered as the referendum has made it on the ballot.
The effort was enough to give voters an opportunity to decide if liquor by the drink should be allowed in Johnson County. Local government jurisdictions, such as counties and cities, in Tennessee, are dry by default, meaning the sale of alcohol and alcoholic beverages is prohibited or restricted. Beer sales are not considered in the distinction of wet versus dry. To allow for liquor-by-the-drink sales and retail package stores, the law must be amended, and this referendum is the first step in doing so. The Tennessee Alcoholic Beverage Commission says.” Liquor-By-the-Drink” licenses allow businesses to sell beverages with an alcoholic content at or above 8 percent. If approved in November, officials say businesses will have to pass a state screening process and meet a list of requirements to sell liquor by the drink.
Johnson County remains one of 13 counties in Tennessee designated as “dry.” Neighboring counties of Carter County, TN and Washington County, VA allow the sale of packaged wine and liquor and bars and restaurants are permitted to serve alcohol. While unincorporated areas in Watauga and Ashe Counties in NC prohibit the sale of packaged alcoholic beverages, the cities of Boone and West Jefferson permit the sale of packaged liquor every day but Sunday. In 2009, the Town of Mountain City voted against allowing liquor sales in the city limits, and the supporters and opponents of the measure offer the same conflicting viewpoints this go-round.
Advocates suggest by passing the resolution, more restaurants and businesses will locate to Johnson County thereby creating more jobs and producing more tax money.
“The economic justification for this is abundantly clear,” wrote Dennis Shekinah, owner of R&D Campground, in a letter to this paper’s editor. “The objections for this idea have historically been voiced from constituents who believe that sales of beer and wine are equated with a disintegration of our moral character as a county. We should all realize that people, locals and tourists alike, who enjoy wine with their dinner or a cold beer with pizza will end up giving their money to an adjoining county that allows it.”
Opponents, however, argue that possible safety issues could offset any increase in tax revenue and tourism and an increase in under-age drinking.
Unlike laws dealing with the sale of beer, which is governed by the local beer board, and since liquor by the drink is governed by the Tennessee Alcoholic Beverage Commission, prospective restaurants and their owners and servers would be required to undergo a licensing procedure before liquor sales can be allowed.
The “consumption on the premises referendum” is worded: “For legal sale of alcoholic beverages for consumption on the premises in Johnson County,” or “Against legal sale of alcoholic beverages for consumption on the premises in Johnson County.”
The second referendum involves raising the sales tax. The Tennessee state sales tax rate is currently seven percent, but county and city tax based tax rates vary depending on the rate passed. Depending on local tax jurisdictions, the total sales tax rate in Tennessee can be as high as 10%. The average local sales tax rate across the state is 2.45 percent making the Volunteer State’s sales tax rate one of the highest in the country with an average tax levy on purchases of 9.45 percent statewide.
The combined sales tax rate for Johnson County, TN is 8.5 percent, which is the total of state and county sales tax rates. The Tennessee state sales tax rate is currently 7 percent. The Johnson County, sales tax rate, is 1.5 percent. Washington County 9.5 and Carter and Unicoi Counties 9.75.
The combined sales tax rate for Abingdon, VA is 5.3 percent, which is the total of state, county and city sales tax rates. The Virginia state sales tax rate is currently 4.3 percent. The Washington County, sales tax rate, is 1 percent.
The “sales and use tax referendum” asks, “Shall the Resolution passed by the Johnson County Commission on May 17, 2018, published in The Tomahawk, a newspaper of general circulation, and as authorized by the be levied and collected pursuant to the Retailer’s Sales Tax Act and the 1963 Local Option Revenue Act and pursuant to Tennessee Code Annotated, sections 67-6-701, et seq., which will increase the local sales and use tax rate from one and one-half percent to two percent (2.00 percent), except as limited or modified by statute, become operative?”