Community Issues That Matter: Sponsors of special events in Elizabethton ensure compliance with business license requirements
By Bob Robinson
Are vendors at special events in the City of Elizabethton, such as the weekly Car Show, Covered Bridge Celebration, the Fourth of July Parade or the carnival that is held in the parking lot of Elizabethton High School, required to collect and remit sales tax to the state of Tennessee?
Vendors at special events are required to have either a business license or a transient vendor permit with the exception of casual and isolated activities by persons that do not hold themselves out as engaged in business. An application for the Business Tax License is available in the Department of Finance at City Hall, 136 S. Sycamore St., Elizabethton. There is a $20 fee for the initial business license. For more information, call Jennifer Murphy, office manager in the Department of Finance, at 542-1518.
Transient vendors are required to pay a fee of $50 for each 14-day period in each county and/or municipality in which such vendors sell or offer to sell merchandise or for which they are issued a business license. Transient vendors will pay their tax liability prior to the first day of engaging in business. Transient vendors shall not be liable for the gross receipts portion of the tax provided for in Tenn. Code Ann. 67- 4-710(b).
If a vendor has a business license that vendor is required to report to the state all sales by location and remit to the state appropriate collections. These funds are then disbursed like all other brick and mortar sales to the City of Elizabethton and Carter County governments, according to City of Elizabethton Finance Director Jerome Kitchens.
Individual sales tax data (such as the amount of sales taxes collected by vendors at special events, by grocery stores, restaurants and other businesses in the City of Elizabethton) is unknown because of restrictions placed by the state of Tennessee on the sources of the data, according to Elizabethton City Manager Fred Edens.
Tennessee Code Ann. 67-4-710 outlines local sales tax collections. “In the case of antique malls, flea markets, craft shows, antique shows, gun shows and auto shows, operated as public facilities from which business is carried on by two or more retailers of tangible personal property, the owner, manager, operator, or promoter of the facility must obtain a business license and collect and submit to local tax officials a $1 fee per day per booth from each exhibitor at the promotion location.
“The provision does not apply to promotions conducted by nonprofit associations, corporations or organizations, or to casual and isolated activities by persons who do not hold themselves out as engaged in business.”
Elizabethton City Council adopted Aug. 9, 2012, Ordinance No. 48-14, which established a new Chapter Seven to the Municipal Code. The ordinance governs and regulates Special Events and use of city-owned facilities and property by third parties in the City of Elizabethton.
In part, the ordinance states: “No circus, carnival, fair, exhibit, menagerie, entertainment, concert, parade or similar activities shall be conducted outdoors or in temporary structures in the City of Elizabethton unless a Special Event Permit has been obtained from the City Council in accordance with this Ordinance. Events with fewer than 300 participants are not required to obtain a Special Event Permit.”
The ordinance requires the holder of the Special Event Permit to have a liability insurance policy in the amount of $1 million “to protect the City and the taxpayers from assuming liability for injuries and/or damages that may occur during a special event.” Food vendors and inflatable operators participating in the special event must be individually insured with the same requirements.
The fee for the granting of any permit shall be $5 for each day of operation for any single event. The fee for a permit shall be paid at the time of filing the application. In the event that the application is rejected, the fee shall be refunded to the applicant.
Activities conducted by schools licensed by the State Department of Education and/or churches, on school or church grounds, are exempt from the requirements to obtain a permit and pay a permit fee.
The City Manager may revoke a permit issued under this ordinance for failure to comply with any conditions contained in such permit, or for any disturbance of the public peace or for occurrences detrimental to the public health.
Violation of this ordinance shall constitute a misdemeanor and may be punishable by a fine of $500 per week, or part thereof, that the violation continues or imprisonment for a term not to exceed one year.
In addition to enforcement as provided above, the City Manager may institute an action in the name of the Council to obtain injunctive or other appropriate relief.
Fire, electrical and safety inspections at Special Events are conducted by the City of Elizabethton. Enforcement of the business tax license requirement and collection and remittance of sales tax by vendors at Special Events in the City of Elizabethton is left to the event sponsor, according to city officials.
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