Streamlined sales tax troubles Berry Hill
03.28.05
By Hanna Tamrat
Diversity Institute Fellow
Tennessee's streamlined sales tax law, passed two years ago, will decrease Berry Hill's city revenue by about $273,000, or 23 percent, if it takes effect in July, the city manager said at a commission meeting Monday.
Joe C. Baker said that Congress is waiting for states to get uniform provisions for taxing Internet sales across the nation. The streamlined sales tax initiative would levy taxes on goods at the point of delivery, rather than at the point of sale.
"Other satellite cities do not benefit as much as it would negatively affect" Berry Hill, said Baker.
Cities like Belle Meade, Brentwood and Oak Hill would apparently benefit from the tax plan because they are primarily residential cities. In terms of percentages, the increase is insignificant for those cities, Baker contended.
"We have businesses that are likely to deliver and residences that are not likely to have goods delivered to them," Baker said before the meeting.
A University of Tennessee study showed that sales-tax revenue for Berry Hill, a city of 674, is $2.41 million. Baker said after the meeting that this amount is split between Berry Hill and the metro school board. If the study's projection is accurate, the 23 percent income reduction for Berry Hill would amount to about $273,000, he said.
However, Baker said there is "a good chance" that the streamlined sales-tax plan might be delayed.
"Implementing the structure would seem to be kind of putting the cart before the horse because Congress hasn't given states permission to tax Internet sales," he said after the meeting.
In other business, officials considered a proposal by Sweeping Corp of America in Nashville to clean city streets for $8,379 a year, Baker said. That breaks down to a monthly charge of $47.50 per mile. He said his findings showed that only 14.7 miles of streets were in Berry Hill, as opposed to the company's estimation of 20 miles.
At issue is whether the sweeping was needed on a monthly basis or occasionally. The six-member board decided to see if Sweeping Corp or another company would accept an on-call request for sweeping service.
"It would be nice to have a sweeper during the winter when there is salt on the streets," Mayor Harold Spray said.
Salt that comes with the snow usually stays until it washes away, said Baker.
Spray added that the board would have to determine incoming revenues before taking up the offer — especially with no knowledge of how streamlined sales-tax laws play out.