By Dan Andrews
andrewsd@knoxfocus.com
On August 25, the Knox County Commission made the decision to repeal the county’s portion of the “amusement tax,” a tax that is applied only to ticket sales for University of Tennessee (UT) football and men’s and women’s basketball home games. The 5.0% tax on tickets sold to UT games at Neyland Stadium and Thompson-Boling Arena has been divided between the City of Knoxville (4.5%) and Knox County (0.5%). Now that the county no longer has this tax, much attention has now become focused on whether the City of Knoxville, should do the same.
According to a study released by the school, the University of Tennessee department of athletics (Tennessee Athletics) has an annual economic impact on Knoxville and the East Tennessee region of approximately $151 million. Also noted by the University are the following facts. Tennessee Athletics and its supporting fans encounter a tax burden faced by no other intercollegiate athletics program or fan base in the nation. Taxes on tickets to UT football and basketball games are at the current tax rate at a combined 14.25%, including a 9.25% state and local sales tax and the “amusement tax” that is 4.5% for the City of Knoxville and, before the repeal, 0.5% to Knox County. At least four SEC athletic programs are not subject to sales tax, and furthermore, no other school in the SEC and the nation is subject to an amusement tax of this nature. The total tax burden for Tennessee Athletics is an SEC-high $4.3 million per year. No other University (or sports entity) in America is forced to pay the municipality a tax based on ticket sales for playing home games in their facilities.
In addition to the indirect financial benefits that the City of Knoxville receives, it also has direct financial benefits related to Tennessee Athletics. Prices for parking in city parking garages ranges from $5 to $30 for passenger cars to $50 for RV full hookup , depending on location and type of vehicle and service (see http://www.cityofknoxville.org/events/utsports.asp for more information.) Also Knoxville Area Transit runs a trolley charter service to and from the stadium. Charging $6 round trip for downtown service and $16 round trip for service going to the Farragut location. Also, the University recently acquired from the city roads surrounding stadium. Recently, the city turned over the streets to the university and maintenance of the roads. However, the city has lost the revenue from the parking meters that previously did exist.
Rogero’s office was very open and transparent and the director of communications provided the following comment. “You probably know that this is not a new issue. City officials have had many conversations with UT officials about it over the years. We have no plans to revisit the issue. Knoxville benefits greatly from being home to UT-Knoxville, and the University also benefits from being in Knoxville. The city provides services including fire protection and emergency response to UT students and staff both on and off campus – not only on home game days, but certainly on those days in particular. UT is also a major landowner in the city, but by virtue of being a government entity, it pays no property taxes to help support city services. The $1.5 million a year generated by the amusement tax – much of which is paid by out-of-town visitors who also benefit from city services and infrastructure while they are here – is money that helps pay down our Convention Center debt. In its absence, city taxpayers would have to make up the difference.”
For residents wishing to express their opinion on this matter to their elected city officials please visit http://www.cityofknoxville.org/citycouncil/members/ or call 311 for more information about contacting your city representatives.
