How does TSDI impact diversion rate estimates?
CPI or TSDI may be used in the Board-approved Adjustment Method to adjust taxable sales for inflation. As shown in Table 1, a higher rate of inflation results in a lower percentage change in taxable sales, and, therefore, a lower diversion rate estimate. Since TSDI measures a significantly lower rate of inflation than CPI, using TSDI instead of CPI increases most jurisdiction diversion rate estimates. In a very few instances, there is no impact on the diversion rate estimate; no jurisdictions are negatively impacted by use of TSDI. Table 1.
