Motor Vehicles, Titling and Registration

Plain English Breakdown

The candidate explanation included terms like 'Combat Zone' which were not supported by the provided official material.

Exemption from Sales Tax for Out-of-State Military Residents

This bill adds an exemption to Tennessee's sales and use tax law for active-duty military service members who are residents of Tennessee but stationed out-of-state under orders from their branch of service.

What This Bill Does

• Adds an exemption for active-duty military service members who are residents of Tennessee but stationed out-of-state under orders from their branch of service when buying a vehicle.
• Requires these service members to provide proof of their stationing and residency status when buying a vehicle.
• Limits the exemption to vehicles titled and registered in the name of the qualifying individual or jointly with a spouse or lineal relative.

Who It Names or Affects

• Active-duty military service members who are residents of Tennessee but stationed out-of-state under orders from their branch of service.
• Vehicle sellers and county clerks who process vehicle registrations for these service members.

Terms To Know

AGR

Active Guard Reserve program, which allows National Guard or reserve military personnel to serve in both civilian and active-duty roles.

Limits and Unknowns

• The bill does not specify how to prove residency or stationing out-of-state status.
• It is unclear if this exemption will apply retroactively for purchases made before July 1, 2026.

Official Summary Text

Present law
provides an exemption to the tax on the sale or use of a motor vehicle that is registered in this state and sold to any of the following persons:



A member of a uniformed service in active military service of the United States

who is stationed in this state or at a military reservation located partially within the boundary of this state and that of another state under orders of the member's branch of service
.


A member of the Tennessee national guard, or reserve member of a uniformed service of the United States, who is a participant in the active guard and reserve
("AGR")
program and is stationed in the state or at a military reservation located partially within the boundary of the state and that of another state under orders of the member's branch of service
.


A member of the Tennessee national guard, or a reserve member of a uniformed service of the United States, who has been called into active military service of the United States

and is stationed in a combat zone
.

In order to
qualify for the
se
exemptio
ns
,
present law requires
the purchaser
to
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 purchaser's status as a member of the AGR program.

The
orders must
be retained in the seller's files and a copy
must
accompany the application for registration.
Additionally, these exemptions only apply
when the vehicle is titled and registered in the name of the qual
ifying individual, either alone or jointly with a spouse or lineal relative.

This bill adds to the list of exemptions described above an exemption to include a member of a uniformed service in active military service of the United States who is a resident of this state and stationed out-of-state under orders of the member's branc
h of service.

Current Bill Text

SENATE BILL 2629
By Gardenhire

HOUSE BILL 1801
By Vital
HB1801
011832
- 1 -

AN ACT to amend Tennessee Code Annotated, Section
67-6-303, relative to military service members.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-6-303(a), is amended by adding
the following as a new, appropriately designated subdivision:
( ) A member of a uniformed service in active military service of the United
States, as defined in § 58-1-102, who is a resident of this state and stationed out-of-state
under orders of the member's branch of service;
SECTION 2. This act takes effect July 1, 2026, the public welfare requiring it.