Chancellor E.G. Moody issued a memorandum and order last week, ruling for Washington County in its lawsuit seeking back payment from the city for taxes collected since the city's voters approved liquor by the drink in 1980.
Washington County's suit seeks $3.4 million, money county officials say the city should have shared with the county's school system. The city, like other cities across the state including Kingsport and Bristol, has taken the position the revenue was generated inside the city, the city operates its own school system, and the money does not have to be shared.
The whole issue became a hot topic statewide a couple of years ago after Hamilton County filed a lawsuit against the city of Chattanooga, which wasn't sharing the liquor-by-the-drink tax revenues even though it had ceased to operate a city school system. Johnson City, though, still operates such a system.
More about the chancellor’s ruling from the Kingsport Times-News.