Tennessee Senate Bill SB2143

Tennessee 2025-2026 Regular Session

• Introduced: 1/23/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 6, Part 3, relative to exemption from sales and use tax on aircraft repair services and parts.

Impact

The projected impact of SB2143 on state laws would be substantial, as it extends tax relief to a broader category of aircraft and their associated repair services. Supporters of the bill argue that this change will promote growth within Tennessee's aerospace industry by reducing operational costs for aircraft owners and service facilities. This, in turn, may lead to increased investment in regional aviation infrastructure and create jobs. The expected fiscal implications for state revenue will be closely monitored, as the sales tax represents a significant source of state funding. Ensuring the economic benefits outweigh the potential loss in tax income will be a point of discussion among legislators.

Summary

Senate Bill 2143 is a legislative proposal aimed at revising the sales and use tax exemption applicable to aircraft repair services and parts in Tennessee. The bill seeks to amend current statutes in the Tennessee Code Annotated that specifically denote exemptions for 'large aircraft'. By changing the language in the law to remove the term 'large aircraft' and instead use the term 'aircraft', the bill significantly broadens the scope of the tax exemption to cover all types of aircraft, including smaller planes and helicopters. This move is seen as a step towards bolstering the aerospace sector within the state, making it more competitive and attractive for both businesses and aircraft owners.

Contention

Despite the perceived benefits, the bill may face opposition regarding its fiscal impact on local government revenues, as any exemption that applies broadly can lead to concerns among municipal leaders who depend on sales tax income to fund local services. Critics might also express apprehension about whether the tax exemption could result in inequities within the aviation repair market, potentially favoring larger operations at the expense of smaller independent repair shops. Discussions surrounding the bill will likely highlight these concerns, weighing the economic growth aspirations against the financial realities for local budgets.