Nashville Approves Sales Tax Increase for Downtown District | Tennessee

(The Center Square) – Visitors to the downtown Nashville business district will pay more sales tax starting July 1.

The increase in the sales tax rate – from 9.5% to 9.75% – is expected to generate $ 2.4 million per year. The money raised through the rate increase can only be spent for specific purposes, primarily cleanliness and increased safety in the Central Business Improvement District of Nashville.

“We are looking at the resurgence of the tourist economy in the downtown core,” Nashville subway board member Freddie O’Connell said on Tuesday as he introduced the tax increase resolution ahead of its passage. “It has exceeded part of the capacity of this area. This would create a dedicated funding stream for cleaning, for some social services. “

Nashville Downtown President and CEO Tom Turner said businesses in the district supported the sales tax increase.

“There is broad support from businesses and traders for this resolution; they’re basically willing to take over to ensure access to the resources needed to successfully run a downtown business, ”said Turner, whose nonprofit promotes itself as a downtown leadership organization. city. “It’s basically the equivalent of 2 cents on every $ 8 hamburger, or something similar, sold downtown.”

The tax rate increase had to first be approved by the Tennessee legislature and signed by the governor before the Metro Council of Nashville could pass its own resolution. Governor Bill Lee signed Senate Bill 424 promulgated on May 18.

“There are challenges any time you have streets that are as heavily used as this part of town. … This district can have thousands of people eating, drinking, entertaining and spending money in these businesses, ”said Bill’s sponsor, Sen. Jeff Yarbro, D-Nashville. “It is wreaking havoc in this region. “

The new tax money will be managed by the Nashville District Management Corporation. A six-member committee of business owners will advise the board of directors on the best uses for money.

O’Connell said during council discussions that it was unlikely the money could be used for overtime at the Metro Nashville Police Department, but that much of the money would be used for services. of household garbage and security.

Yarbro and O’Connell both mentioned the Christmas Day bombing in downtown Nashville as the reason the area needs tighter security.

“It became a really big issue, especially after the tornado passed through Nashville as well as the Christmas Day bombing, and we realized it was important to make sure we kept our downtown safe and clean, ”said Rep. Jason. Powell, D-Nashville, who sponsored the bill in the House.

There are several sales tax exclusions, including professional services, transient accommodation, tickets to live events or paid sporting events, alcohol already subject to alcoholic beverage tax , newspapers or publications, and overnight or long-term parking. .

“These fees will be used for two specific purposes: to incite these tourist events and to improve the public safety and the cleanliness of this space,” said Yarbro.