How tourism-generated tax revenue supports Sevier County communities

by: Naomi Hillmer

Posted: Mar 23, 2026 / 05:51 PM EDT

Updated: Mar 23, 2026 / 06:06 PM EDT

PIGEON FORGE, Tenn. (WATE) —  The Tennessee Department of Tourist Development recently announced that over $2.03 billion in state tax revenue was generated by the tourism industry in Tennessee last year.  

That money goes back into communities in the form of lowering taxes for residents and funding local infrastructure. Out of all 95 counties in Tennessee, Sevier County ranks third in visitor spending, just after Davidson and Shelby Counties, which are home to two of the largest cities in our state, Nashville and Memphis. 

“So they generate a tremendous amount of sales tax, which allows us, as a city, to keep our property taxes low and allows us to have some of the best public services that you can buy,” said Pigeon Forge Tourism Director Leon Downey.  

From a new fire hall to over 90 sworn police officers in the city, Downey said this is thanks to the money spent by people on vacation.  

“So a lot of that money goes for things like transportation, for education, for public safety, which that way our residents who live here don’t have to pay for that because our guests are paying for it,” he said.  

With a permanent resident population of just over 6,000 people, he said the over 10 million tourists they see each year benefit from the money they spend as well.  

“With that number of visitors that we have just in Pigeon Forge alone, you know, the infrastructure costs are outrageous because you have to have more water capability and things of that nature,” said Downey, “Like the NightFlight Expedition that opens later in the spring here at Dollywood will have 500 million gallons of water in it a day, think about that.”  

He also said Dollywood sets the pressure gauge for tourism in their area.  

“Basically, I say that the faucets are open and people are here, and when they’re closed, the faucets are closed. So having Dollywood open is huge for us,” said Downey.  

With Dollywood opening earlier this month, and spring breakers making their way up the parkway, he said new attractions keep tourists coming back to generate that revenue.  

“There are 30 new businesses in Pigeon Forge alone this year. So there’s always, every year, there’s something new and different, that for our repeat visitors, they love to come back because they know there’s always going to be something new and different for them to go experience when they’re here,” said Downey.

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Pigeon Forge was also recently named one of the best small towns in the South by the readers of “Southern Living” magazine, which Downey said could help bring more visitors to the area this spring.  

Also in Pigeon Forge, the spring “Rod Run” car show is returning in April, which drives thousands of people to the area.