Knox County, Town of Farragut owe Knox Co. Schools more than $1 million in back mixed drink taxes

KNOXVILLE, Tenn. (WVLT) -- The Town of Farragut and Knox County owe Knox County Schools more than $1 million in back mixed drink taxes.

The Knox County Mayor's office said the law requires bars and restaurants to send all mixed drink taxes to the State Department of Revenue, which sends half of it back to municipalities. Half of that money is supposed to go to schools, but the County Mayor's office said the way the law is written is confusing, which is why it wasn't caught until now.

Knox County Schools sent a statement saying that the school system recently learned of the possibility that it's owed money and said, "We understand the county is working with the Town of Farragut to ascertain the scope of the issue. Other questions with respect to this issue should be directed to Knox County Finance since they manage all of the revenue for the county."

The Finance Director was off on Friday, but the Mayor's office said the county owes approximately $300,000 in back mixed drink taxes, while the Town of Farragut may owe more than $1 million.

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