Rural King addresses 'economic development fee' in Kingsport

KINGSPORT — Rural King has issued a statement following the community's concern over a 1% "economic development fee" implemented at the Kingsport store.The company's statement said the fee helps them "offset a small portion of the significant investment" into Kingsport."The economic development fee helps Rural King offset a small portion of the significant investment in the Kingsport community, which includes new employment opportunities, increased tax revenue, and access to a broad array of differentiated products and services," Rural King said in the statement. "We're committed to being valuable long-term partners in the Kingsport community and look forward to demonstrating our positive impact on the local business landscape."BackgroundRural King has been in the works for Kingsport for nearly two years. The store hosted its grand opening at 2405 Memorial Blvd. on April 25.Over the weekend, an image started circulating on social media of a sign displayed at the Kingsport Rural King alerting customers of the fee. According to the sign, the fee was added to "comply" with the Memorial Boulevard Development Project and to "help pay for the cost of improvements" within or for the benefit of the project.The full text of the sign can be read below:Pull Quote"AN ECONOMIC DEVELOPMENT FEE OF 1.0% ON THE RETAIL PRICE HAS BEEN ADDED TO COMPLY WITH THE MEMORIAL BLVD DEVELOPMENT PROJECT AND HELP PAY FOR THE COSTS OF IMPROVEMENTS (E.G. BUILDINGS, PUBLIC FACILITIES, COMMON PLAZAS, ROADS, PARKING AREAS, AND OTHER IMPROVEMENTS) WITHIN OR FOR THE BENEFIT OF THAT PROJECT. THIS IS A FEE AND NOT A TAX AND IS IN ADDITION TO APPLICABLE SALES TAX. PLEASE CONTACT EDF COLLECTION SERVICES, LLC IF YOU HAVE QUESTIONS AT PO BOX 1066, MATTOON, IL 61938 OR COLLECTINGAGENT@EDFCOLLECTIONSERVICES.COM. AT THIS TIME, DUE TO THE TECHNICAL LIMITATIONS OF OUR POINT-OF-SALE (POS) SYSTEM, THE ECONOMIC DEVELOPMENT FEE WILL APPEAR ON YOUR RECEIPT AS 1.1% INCREASE IN THE TAX AMOUNT PLEASE NOTE THAT THIS ADDITIONAL 1.1% DOES NOT REPRESENT A GOVERNMENT-IMPOSED TAX BUT RATHER THE 1.0% ATTRIBUTED TOWARDS THE ECONOMIC DEVELOPMENT FEE. OUR IT DEPARTMENT IS ACTIVELY WORKING TO MODIFY THE POS SYSTEM TO ENSURE THAT THE FEE IS SEPARATELY ITEMIZED IN THE FUTURE."City's responseOn Tuesday, the city of Kingsport issued a statement providing clarification on the fee's origins."The City of Kingsport wants the community to know, this economic development fee is NOT a city-mandated fee, the funds DO NOT go to the City of Kingsport and the city played no part in instituting the fee," the city said in the statement. "The decision to impose this fee falls solely on Rural King."Kingsport Economic Development Director Steven Bower called the fee a "private fee implemented at the discretion of the business," according to a recent release from the city."We understand there may be some confusion regarding the 'economic development fee' being charged at Rural King. This fee is not a part of any economic development project by the City of Kingsport, rather it is a private fee implemented at the discretion of the business," Bower said. "We have been in communication with Rural King and greatly appreciate their investment but look to them to add clarification regarding their fee."About the Memorial Boulevard projectThe Kingsport Times News recently reported that the Tennessee Department of Transportation will open bidding in October for the project to widen Memorial Boulevard, or State Route 126.According to TDOT, Phase 1 will be fully funded through the Transportation Modernization Act — which was passed by the General Assembly in 2023. While the project will be built in three phases, TDOT states only Phase 1 is currently funded.Rural King is located on the Fort Henry Mall property, which has an address of Memorial Boulevard.