Why the city’s claim that outsiders will pay nearly half of the $9 billion light-rail plan is

wrong

They claim: “A recent study released by the Nashville Area Chamber of Commerce shows that
nearly half (47%) of sales tax collections in Davidson County are generated by out-of-county
residents.”

What’s included in the 47%? 1

• The report data lists Davidson County retail revenue at $16.5 billion and $5.9 billion in
visitor spending (2016)
• Spending by nearby non-Davidson County residents, estimated at $7.7 billion by the US
Travel Association and ESRI — includes purchases of vehicles, home furnishings, food
and grocery, clothing, sporting goods and restaurants

Here’s why they are wrong:

The USTA impact calculator, which they draw the $5.9 billion from, reflects data for TN-
Congressional District 5 — which includes all of Davidson County, Dickson County, and a part
of Cheatham County. The USTA economic impact number already includes residents outside of
Davidson County, but the report still adds non-Davidson County retail sales data to that.
• They use this calculation to justify a false claim that outsiders will pay half of the sales
taxes on their $9 billion light-rail plan — while also hinting at the fact that they’ve
fudged on their numbers 2

• A more honest representation of the tax burden that tourism brings in is at 20% ($3.3
billion of the $16.5 billion in retail revenue) — in real dollars, that still leaves $13.2
billion on the shoulders of everyone in Davison County.

The U.S. Census American FactFinder data on employment and annual payroll in the retail
3

sector (for the Nashville MSA) shows Davidson County accounts for: 37% of the MSA
population; 44% of retail employment; and 46% of retail payroll, suggesting that the sales-tax
burden that Davidson County carries is:

37% (MSA population) ÷ 46% (retail) = 80% tax burden

• The tax burden that tourism brings in is at about 20%; in real dollars, that still leaves
$13.2 billion — 80% — on the shoulders of everyone in Davison County.

What’s not accounted for: As Nashville increases its taxes, a widening gap in the sales tax
rate between Davidson and surrounding counties will push some shopping out of Davidson. So,
people who move among the counties daily can readily change shopping locations. When that
happens, their fictional 47% diminishes even more.

1
Sources: US Travel Association Economic Impact calculator for TN-5 and Sales tax and Davidson Country report by Garrett
Harper
2
In explaining their math, they admit that sales tax revenue by USTA and ESRI is not tracked by consumer to location, so that
their numbers are “gauged in a general way”.
3
https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml
1