HB 308

Present law generally authorizes a county, by resolution of its county legislative b ody, and an incorporated city or town, by ordinance of its governing body, to levy a sale and use tax not to exceed 2.75 % as long as the tax levied appl ies only to the first $1,600 on the sale or use of any single article of personal property. Additionall y, sales of tangible personal property upon which a state sales and use tax is levied is subject to a local sales and use tax at the rate of 2.25% when obtained from any vending machine or device. For Shelby County, this bill authorizes such rates to inc rease to 3.75%. However, all revenue generated from the increase in the county tax rate from 2.25%, and from the rate of 2.75% in those cities and towns that have that as their operative tax rate on the effective date of this act, to 3.75% must be used by the county exclusively for the construction of a new county jail or to retire debt, including principal and interest and related expenses, on such construction. APPORTIONMENT AND DISTRIBUTION Apportionment and distribution of revenue generated from suc h increase in the tax rate must continue for a period of eight years from the date collections begin or until the first day of a month occurring at least 30 days after the debt is retired, whichever is sooner. If the debt is retired prior to the expiratio n of the eight-year period, then the county must provide notice to the department of revenue within 10 days of the debt being retired. Upon the expiration of the authorized period for the levying of the tax rate at 3.75%, the tax rate within the county a nd its cities and towns reverts to 2.75%. However, t he levy of the tax by cities and towns that have an operative tax rate of 2.75% on the effective date of this bill precludes , and has priority over , the county tax rate of 2.75% resulting from the revers ion described in this bill . A ll revenue generated from the increase in the county tax rate from 2.25% in effect prior to the effective date of this bill to 2.75% after the reversion described in this bill must be allocated and distributed by the county t o the county sheriff's department for administrative, operational, and capital expenses of the department. Revenue required to be so allocated and distributed must be in addition to other state and local moneys appropriated to the county sheriff's departm ent , and the county must not use the revenue to supplant such moneys.