Tax for Sheffield schools removed

TUSCUMBIA -- A 5-mill property tax earmarked for Sheffield's school system has been removed.

It was eliminated after the Colbert County revenue commissioner's office learned that the 20-year tax expired in October 2005 and was never renewed.

Sheffield city council members were informed about the situation in late January.

City Clerk Clayton Kelley told council members that they must call a referendum to continue the tax.

To save money, the council agreed that it should call for the referendum at the same time the city has a referendum on Sunday liquor sales.

That issue cannot be addressed until the state Legislature allows it.

So far, a date has not been set.

The 5-mill tax was "supposed to be renewed every 20 years," said Colbert County Administrator Donna Llewellyn said. "It was inadvertently overlooked and was not presented to the council."

Llewellyn said the state Department of Revenue advised her that when the county passed its new ad valorem tax structure, the 5-mill tax in Sheffield should be left out.

That drops the ad valorem tax rate that goes to Sheffield city schools from 19 to 14 mills.

A mill is one-tenth of one cent.

Kelly said the 5-mill tax brings in about $200,000 annually.

Llewellyn said if Sheffield voters approve continuing the tax, the county would approve a new tax structure.

Colbert County Revenue Commissioner Bill Thompson said his office sends certified letters to municipalities each year to ask if there are any changes to their tax structures.

"We pretty well stay on them to get an answer back to us," Thompson said.

Kelly said that if the tax is continued, it could be made retroactive to October 2005, if voters approve.

Kelly said the tax was originally approved in October 1985.

Thompson said it's possible the tax was erroneously collected for a year. He said an audit could determine if there are any consequences arising from collecting the tax after it had expired.

Mayor Billy Don Anderson said he did not know what the legal ramifications would be. He referred questions about the tax to City Attorney Vince-McAllister.

"I think that probably there will be a vote to renew the tax," McAllister said. "That would be my recommendation."

McAllister said he does not know if there will be any fallout from the fact the tax was collected after it expired.

"I'm sure it's happened many times before," McAllister said. "When you have a 20-year levy back in the old days, how do you keep track of it?"

Russ Corey can be reached at 740-5738 or russ.corey@timesdaily.com.