JACKSBORO—Campbell County Public Schools could benefit from a new law requiring Internet retail giant Amazon to begin collecting sales tax on all merchandise purchased by Tennessee residents.
The law goes into effect Jan. 1.
“There is no way of predicting how much the tax revenue from Amazon will be,” said Campbell County Finance Director Jeff Marlow. “You might get some figures after the first quarter and see where you are through a couple of cycles, but you wouldn’t have any way of predicting on an annual basis.”
During a recent meeting of the Campbell County Board of Education, attorney Dail Cantrell informed board members they should be ready to take advantage of the new revenue stream.
“You need to have a plan in place to jockey for your portion of that pie,” said Cantrell. “Keep in mind that sales tax revenue is a big funding source for school systems. It’s going to be a significant source of revenue when it comes in. Tennessee is one of the first states to go after this, because our sales tax revenue is so high. We don’t know how much each of the municipalities is going to get. What Governor Haslam has indicated is that he wants it to all go into BEP (Basic Education Program) funding, and then you would get your portion of that.”
Currently, the state automatically gets seven percent from each sale, but the other 2.25 percent goes to the local governing body at the point of sale. The only exception is Lake City, which is at the Anderson County sales tax rate of 2.75 percent.
Marlow said half of all the local sales tax revenue collected goes to the county for funding public schools. The other half goes to the municipalities in which the sale occurred.
“Basically, three fourths of every dollar goes to the county and one fourth to the municipalities,” said Marlow.
School Board Chairman Rector Miller said he welcomes any new funding source with open arms. However, he is concerned that it could possibly hurt the maintenance of effort agreement between the county commission and board of education.
“If our numbers don’t go up and we don’t get any more money from the state, we have to rely on county government,” said Miller.
Marlow said it’s much too early to begin building revenue from the new tax in the annual school budget.