Taxes, Exemption and Credits

Plain English Breakdown

The official source material does not provide information on the number of Tennessee National Guard members who would be affected by this legislation or details about transactions exceeding $15,000.

Tennessee National Guard Sales Tax Exemption

This bill creates a sales tax exemption for Tennessee National Guard members when they buy their first vehicle within five years, up to $15,000.

What This Bill Does

• Adds an exemption from the state's sales and use tax for motor vehicles purchased by qualifying Tennessee National Guard members.
• Limits the exemption to the first $15,000 of the purchase price.
• Requires that the exemption applies only once every five years per member.
• Necessitates proof of membership in the Tennessee National Guard and good standing documentation from their unit for the exemption.

Who It Names or Affects

• Tennessee National Guard members who buy a vehicle within five years.
• Vehicle sellers and county clerks dealing with these transactions.

Terms To Know

Sales Tax

A tax charged by the government on the sale of goods or services, usually calculated as a percentage of the purchase price.

Exemption

An exception from paying taxes or fees that would normally apply to certain individuals or transactions.

Limits and Unknowns

• The exemption only applies to one vehicle within a five-year period.
• It is unclear how many Tennessee National Guard members will benefit from this exemption.
• The bill does not specify what happens if the purchase price exceeds $15,000.

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

HOUSE BILL 193
By Jones R

SENATE BILL 294
By Crowe

SB0294
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.