published Monday, May 12th, 2014

City of Chattanooga contests school system taxes lawsuit

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    Hamilton County Court House

After agreeing to pony up almost $12 million in past due taxes, the city of Chattanooga has filed a motion claiming the Hamilton County Board of Education doesn't have the right to file a lawsuit to recover the liquor-by-the-drink taxes.

The city's motion, filed today in Hamilton County Chancery Court, claims the taxes are the state's property and the state should have to join with the county to recover the money.

"The school board has ignored the state's prior interest in the outcome of this matter and its exclusive right to bring it," the lawsuit states. "The school board doesn't have a standing as a result."

School board attorney Scott Bennett said he doesn't think the city has a claim and this is a tactic to stall the lawsuit.

The school system filed a lawsuit in April after it said talks with Mayor Andy Berke's administration over more than $11.7 million in past due taxes were getting nowhere. Berke offered to pay the $11.7 million over five years. But the administration balked when the school system asked for back taxes dating back to the 1980s.

For complete details, see tomorrow's Chattanooga Times Free Press.

about Joy Lukachick Smith...

Joy Lukachick Smith is the city government reporter for the Chattanooga Times Free Press. Since 2009, she's covered crime and court systems in North Georgia and rural Tennessee, landed an exclusive in-prison interview with a former cop convicted of killing his wife, exposed impropriety in an FBI-led, child-sex online sting and exposed corruption in government agencies. Earlier this year, Smith won the Malcolm Law Memorial Award for Investigative Reporting. She also won first place in ...

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