Taxes, Exemption and Credits

Plain English Breakdown

The official source material does not provide information on the exact documentation required or the specific penalties for non-compliance with the bill's provisions.

Tennessee National Guard Motor Vehicle Sales Tax Exemption

This bill creates an exemption from sales tax for Tennessee National Guard members when they buy a car, but only up to $15,000 and once every five years.

What This Bill Does

• Adds a new rule that allows Tennessee National Guard members to avoid paying sales tax on the first $15,000 of a car's price if they are buying it for personal use.
• Requires the buyer to show proof of their status as a member and good standing in the National Guard unit when buying the car.
• Needs sellers or county clerks to keep copies of this proof and documentation on file.

Who It Names or Affects

• Tennessee National Guard members who buy cars for personal use.
• Car dealerships selling vehicles to Tennessee National Guard members.
• County clerks handling car registrations for these members.

Terms To Know

Sales Tax

A tax added to the price of goods and services when they are sold.

Exemption

An exception that allows someone not to pay a certain tax or fee.

Limits and Unknowns

• The exemption only applies up to $15,000 of the car's price.
• It can be used for one vehicle purchase every five years.
• The bill does not specify what happens if someone buys a car before July 1, 2025.

Official Summary Text

Present law establishes a sales and use tax exemption for
motor vehicle
s
registered in this state if the vehicle is sold
in certain c
ircumstances to the armed forces.
In order to qualify for the exemption, the purchaser
must
provide to the seller, or to the county clerk when appropriate, a copy of the official orders related to the stationing of the purchaser and, if applicable, the pu
rchaser's status as a member of the

active guard and reserve program.

The orders
must
be retained in the seller's files and a copy
must
accompany the application for registration.

The exemption only
applies
when the vehicle is titled and registered in th
e name of the qualifying individual, either alone or jointly with a spouse or lineal relative.

This bill adds a similar
exempt
ion

for
a motor vehicle registered in this state if the vehicle is sold to a qualifying member of the Tennessee national guard.
Th
is
exemption applies only to the
first
$15,000 of the sales price and only to one vehicle within a five-year period.
T
o qualify for th
is
exemption, the purchaser
must
provide to the seller, or to the county clerk when appropriate, proof of the purchase
r's status as a member of the Tennessee national guard and documentation from the member's national guard unit certifying that the member is in good standing. A copy of the proof and documentation must be retained in the seller's files and a copy must al
s
o accompany the application for registration.

Current Bill Text

SENATE BILL 294
By Crowe

HOUSE BILL 193
By Jones R

HB0193
001039
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 67,
Chapter 6, Part 3, relative to exemption from sales
tax on motor vehicles for members of the national
guard.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-6-303, is amended by adding the
following as a new subsection (d):
(1) There is exempt from the tax imposed by this chapter the sale or use of a
motor vehicle that is registered in this state in accordance with title 55, if the vehicle is
sold to a qualifying member of the Tennessee national guard. The exemption under this
subsection (d) applies only to the first fifteen thousand dollars ($15,000) of the sales
price and only to one (1) vehicle sold to such individual within a five-year period.
(2) In order to qualify for the exemption provided in this section, the purchaser
shall provide to the seller, or to the county clerk when appropriate, proof of the
purchaser's status as a member of the Tennessee national guard and documentation
from the member's national guard unit certifying that the member is in good standing. A
copy of the proof and documentation must be retained in the seller's files and a copy
must also accompany the application for registration.
SECTION 2. This act takes effect July 1, 2025, the public welfare requiring it, and
applies to purchases of motor vehicles made on or after that date.