Wilson County Schools’ Board of Education won its lawsuit against the City of Mt. Juliet last week when Chancery Court Chancellor C.K. Smith gave the board a judgement of $472,660.48 for payments from liquor-by-the-drink taxes.
The figure was an agreed upon amount, WCS board attorney Mike Jennings said.
The city did not pay the board of education its share of the taxes beginning in 2013. According to the court filing from 2014, the WCS board said it was due back funds from Mt. Juliet.
The city, however, cited state court rulings going back to 1883 that stated cities would not have to pay the taxes to the county schools. It alleges that the school board has no authority to sue the city, but the Wilson County Commissioners, which is the governing body in the county, could sue for the funds.
The filing paperwork stated that cities with liquor-by-the-drink are required, by state law, to collect 15 percent of all liquors by the drink costs. That money is supposed to be divided by 50 percent, with 50 percent going to the city and the other half going to the school systems.
The City of Lebanon also didn’t pay its half to Wilson County Schools, but it eventually agreed to pay the back tax over a 10-year period, according to the court paperwork.
The lack of payment was discovered by the school board in 2013, the court paperwork stated. Mt. Juliet did pay part of what it owed ($30,917.10), but still owed the board of education fund $449,280.50.
The paperwork requested that Mt. Juliet pay the amount, from the inception of the liquor by the drink tax until June 30, 2013.
In a filing from 2014, Mt. Juliet stated that the county was not eligible to collect a portion of the tax revenues because liquor-by-the-drink had not been passed in the county, but rather in the cities.
Mt. Juliet filed a motion to dismiss in 2015, but the motion was denied.
A 2018 judgement by Chancellor Smith ordered that Mt. Juliet’s Motion for Summary Judgement was denied and that WCS’ board was eligible to receive the funds.
In October 2018, Mt. Juliet Commissioners voted to offer a settlement of $325,000 to the school board. The board of education declined that offer. Other settlement offers have been made, but all were declined by the WCS board.
“Chancellor Smith also awarded us 4.5 percent pre-judgment interest on each and every payment from the time the payment was due until now,” Jennings said. “He assessed the court costs against the City of Mt. Juliet. He allowed no offsets (and) found this to be a final judgment.”
Jennings added that, “it will take some time to calculate the full amount of interest, as it must be figured from the date of each payment as it came due.”
Mt. Juliet City Manager Kenny Martin declined to comment.