A $2 airport departure tax levied to help pay off debt on the $585 million Music City Center has not been fully enforced, leaving Metro shortchanged on tax revenues and prepared to take action.
Passengers riding taxicabs and other shuttle services that depart from the Nashville International Airport are required to pay a $2 fee on top of normal transit charges, as part of the tourist-targeted tax structure designed to bankroll the city’s new convention center.
But according to Metro Finance Director Richard Riebeling, transit companies are only applying the $2 fee half the time, leaving Metro collecting approximately $400,000 annually from the departure tax when it should be generating $800,000 a year. He said the airport charges a similar fee, which it, too, hasn’t fully collected.
“We just think from talking to the airport that not everybody is paying,” Riebeling said. “Our sense is we’re probably leaving half the money on the table right now.”
After meeting with airport leaders this week, Riebeling informed the nine-member Convention Center Authority Thursday that an ordinance is in the works that would authorize $1.5 million to install devices called transponders inside departure vehicles to monitor fee collections.
The Metro Council, Convention Center Authority and Nashville Airport Authority would all need to sign off on the bill. Essentially, Metro would front the $1.5 million and be paid back by revenues generated by operations at the convention center. Riebeling said the ordinance could be drafted by next month.
“We’ve been talking to the airport for the past year about potentially doing this,” Riebeling said. “We had a final meeting on it yesterday and reached a verbal agreement on it.”
As for the hotel-motel tax, which produces a much larger revenue stream for Music City Center, Riebeling said he’s confident Metro is collecting its full share.