News Talk 94.1/AM 1600 Where The Upper Cumberland Talks
A sales tax reporting issue has been corrected and some $636,000 in revenue on the way to Putnam County from last year’s summer’s sales tax holiday.
Cookeville City Manager James Mills said the Tennessee Department of Revenue reimbursed the lost money. The issue began with August tax receipts, the first month of the sales tax holiday on food, which came in some $235,000 less than expected. That number increased in September to $285,000.
“In further conversations with the Department of Revenue they acknowledged there was misreporting and that they would work to correct it,” Mills said.
Mills said the October numbers appeared closer to normal, representing the final month of the sales tax holiday. Mills said the city’s finance department in connection with State Representative Ryan Williams continued to push for an answer to Cookeville’s problem. Mills said in January, the state said it had found the issue.
Cookeville first noted an issue with its sales tax receipts in 2022 during a one-month sales tax holiday. When the sales tax holiday was enacted two years ago, the Legislature said that local governments had to be made whole from the reduction. Cookeville’s revenues came up short, at which time the city reached out to the state.
“Several weeks later, the Department of Revenue reported that they had investigated the matter and that everything had been calculated correctly,” Mills said.
The correction means money for Cookeville as well as the Putnam County Schools. Under state law, schools receive 58 percent of sales tax money.
Williams said the issue appeared to be limited to Cookeville. He said it likely was a misreporting by a retailer. Williams said his support of future sales tax holidays would depend on getting the issue resolved.
“We are very much appreciative of Representative Williams’ assistance in the matter and are grateful to the Department of Revenue for working with us to correct the problem,” Mills said.
