January 8, 2002
Dear Administrator of Elections:
Here is a copy of Sales Tax: Handbook for Elected Officials (Revised October 1984).
There is also a short facts sheet on issues pertinent to the local option sales tax. Although the
Sales Tax... publication is outdated in some respects it is still substantively correct with respect
to how the sales tax is raised by a municipality, and with respect to the ordinance and ballot
necessary for that raise. As I understand the facts, the City wants to raise its local option sales
tax from 2.25% to 2.75%.
The sample ordinance is found in Form 4 on page 9. I suggest that Section 1 be
simplified to read as follows:
Section 1. Under the authority of Tennessee Code Annotated, '
67-6-701 et seq., the sales tax of the City is increased from 2.25%
to 2.75%, except that where different sales tax rate for particular
goods and services are set by statute and are not subject to
variation by ordinance.
A recent amendment to the Local Option Sales Tax Law also requires the local
government levying a sales tax designate n the ordinance levying the tax the county or municipal
officer against whom suit may be brought for recovery of sales taxes illegally assessed or
collected. Presumably, that requirement also applies where the local government is increasing
the sales tax levy. For that reason, the city should add a section in the ordinance along the
following lines:
Section___. As required by Tennessee Code Annotated, ' 67-6710(d)(2), the city designates the
___________________________ (Logical designees could be
the mayor, the recorder, or the treasurer. Arguably a designee
could be the city manager, but the city manager may not be an
“officer” within the meaning of this statute.) as the municipal officer
against whom suit can be filed for the recovery of sales taxes
illegally assessed or collected.
Form 6 on page 11 contains a sample ballot question. Note that as I told you on the
telephone, technically voters are voting on the ordinance rather than directly on the sales tax
increase. It is a fine point, but one to remember in wording both the ordinance and the ballot
question. I suggest the ballot question be worded as follows:
Shall Ordinance No. ________, which increases the city’s sales
tax from 2.25% to 2.75%, except where the sales tax rate is limited
or modified by statute, be approved?
January 8, 2002
Page 2
For the Ordinance______________________
Against the Ordinance _________________
That is a shorter version of the ballot question than is contained in Form 6, but I am a
firm believer in making ballot questions as short and clear as possible, and in omitting from them
dates and other clutter not necessary to the validity or the understanding of the question.
Let me know if I can help you further on this or any other question or problem.
Sincerely,
Sidney D. Hemsley
Senior Law Consultant
SDH/