|Legal Opinion: |
Text of Document: This is in response to your question concerning the allocation and distribution of beer tax revenues under the fact situation that you posed. As I understand it, a golf course under the ownership of a person/entity from an adjoining city is partially located within your city limits. You have inquired as to what, if any effect that would have on your city’s share of beer tax monies.
There are two kinds of beer tax revenues that are distributed to local governments in Tennessee. The first type is the per-barrel beer tax. All cities in Tennessee receive a share on a per capita basis of the per-barrel tax on the manufacture, transportation and sale of beer. Whether or not any particular municipality even permits the sale of beer has nothing to do with its share of the per-barrel tax under T.C.A. § 57-5-201 et seq. The taxing statute states in part as follows:
§ 57-5-201. Barrels; purchase from local wholesalers or manufacturers
(a)(1) Every person, firm, corporation, joint-stock company, syndicate or association in this state storing, selling, distributing, or manufacturing such beer or other beverages as are described in this chapter shall pay a special privilege tax, in addition to all other taxes, in an amount equal to three dollars and ninety cents ($3.90) per barrel of thirty-one (31) liquid gallons stored, sold, distributed by gift or sale or manufactured in this state.
Distribution of the tax monies is set forth in T.C.A. § 57-5-205:
§ 57-5-205. Distribution of tax revenues
The state privilege tax collected under §§ 57-5-201--57-5-204 shall be paid into the state treasury and shall be divided as follows:
(1) From the proceeds of the amount so collected, ten and five hundredths percent (10.05%) shall be paid to the several counties equally to be used by them for general purposes, ten and five hundredths percent (10.05%) shall be divided between the existing incorporated municipalities according to population to be used by them for general purposes, and forty-one hundredths percent (.41%) shall be reserved and transferred to the department of mental health and mental retardation to assist municipalities and counties in carrying out the provisions of the "Comprehensive Alcohol and Drug Treatment Act of 1973" compiled as title 39, chapter 17, part 4, 53-11-408, 57-3-306, title 33, chapter 8 and this section. Any municipality or county shall have the right to take not more than two (2) special censuses at its own expense at any time during the interim between the regular decennial federal census. Such right shall include the current decennium. Any such census shall be taken by the federal bureau of the census, or in a manner directed by and satisfactory to the Tennessee state planning commission. The population of the municipality or county shall be revised in accordance with the special census for purposes of distribution of such funds, effective on July 1, following the certification of the census results by the federal bureau of the census, or the state planning commission to the commissioner of finance and administration; the aggregate population shall likewise be adjusted in accordance with any such special census, effective the same date as aforementioned....
The second type of tax is the local wholesale beer tax. et seq. imposes a tax on sales from wholesalers to retailers (which by definition, includes those persons or entities who sell beer for consumption on the premises ( See T.C.A. § 57-6-102(10)). The distribution of the tax is set forth in T.C.A. § 56-6-103, and is a situs-based tax. Subsection (d) is the dispositive section:
§ 57-6-103. Collection; calculation; disposition
(a) There is hereby imposed on the sale of beer at wholesale a tax of seventeen percent (17%) of the wholesale price. Every wholesaler, on or before the twentieth day of each month, based on wholesale sales in the preceding calendar month, shall remit to each county the amount of the net tax on such person's wholesale sales to retailers and other persons in the county, and to each municipality the amount of the net tax on such person's wholesale sales to retailers and other persons within the corporate limits of the municipality.
(d) The tax collected on any such sales made to licensed retailers shall be paid to the county or municipality in which the retailer's place of business is located, and the tax on all other sales made at the wholesaler's place of business shall be paid to the county or city in which the wholesaler's place of business is located.
As you can see, the statute makes it clear that distribution of the local wholesale beer taxes is made according to where the retailer’s place of business is located. The this case, that location is within your city limits.