OCOEE, Tenn. — Polk County officials said Wednesday an appeals court ruling blocking a tax on Ocoee River rafting will damage the county’s budget.

“On top of the new jail and school costs, it will devastate this county’s economic base,” County Commissioner John Pippenger said. The ruling represents a county loss of almost $700,000 a year based on figures showing 278,000 commercial rafters in 2007.

The Tennessee Court of Appeals ruled Monday that the county’s $2.50 per ticket tax violates the U.S. federal Maritime Transportation Security Act. The rafting areas in the Ocoee River are in the Cherokee National Forest, and the act says local governments may not tax watercraft “on any navigable waters subject to the authority of the United States.”

The appeals court also overturned a chancellor’s ruling that rafting outfitters did not have standing to bring a lawsuit challenging the tax.

Mr. Pippenger said if there is a vote by the County Commission, he will approve taking the appeal to the Tennessee Supreme Court.

County Mayor Mike Stinnett said he and county attorneys are reviewing the decision and it will be discussed at the Nov. 20 commission meeting.

“I really don’t have anything definite on this until we evaluate it,” Mr. Stinnett said.

Ocoee Outfitters Association President Carlo Smith said it wasn’t a good day for the county or the outfitters.

He said outfitters are the largest industry in Polk County and would be affected if commissioners have to raise property taxes to offset the loss.

The tax has been in dispute practically since the county imposed it in 2001.

Neither side can expect a windfall from the ruling. Some outfitters had collected the fee under protest, but the court ruled that since it came from ticketbuyers, the outfitters shouldn’t get that money back.

The court said the county should hold ticket-tax receipts for a year so people who paid the tax can apply for refunds. Whatever’s left will be turned over to the state treasury.

Polk County Trustee Patsy Jenkins said she didn’t know Wednesday how much money the tax had generated.

“I’m busy and I don’t have any papers on it yet, and if the attorneys want a total, they can send someone over to pull it,” Ms. Jenkins said.

The court ordered Polk County to pay legal costs in the case.

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