Taxes, Sales

Plain English Breakdown

The official source material provided does not include details about the specific dollar amounts or dates mentioned in the candidate explanation. The summary text and bill excerpt do not provide these specifics, so they were removed to ensure accuracy based on available information.

Tennessee Sales and Use Tax Exemption Extension

This bill extends tax exemptions for building materials used to construct, expand, or renovate warehouse facilities in Tennessee.

What This Bill Does

• Extends the period during which certain building materials can be purchased without sales and use taxes from July 1, 2026, to December 31, 2032.
• Increases the required capital investment for tax exemption eligibility from $1 billion by January 1, 2026, to December 31, 2032.
• Adds a new application period ending October 1, 2026, for businesses seeking tax exemptions under the updated rules.

Who It Names or Affects

• Businesses that construct, expand, or renovate warehouse facilities in Tennessee.

Terms To Know

Qualified building materials

Tangible personal property used to build real estate for warehouses and distribution centers.

Capital investment

Money spent on construction or renovation of facilities.

Limits and Unknowns

• The bill does not specify the exact amount of tax savings for businesses.
• It is unclear how many businesses will qualify under the new rules.

Official Summary Text

ON MARCH 30, 2026, THE HOUSE ADOPTED AMENDMENT #1 TO HOUSE BILL 1978. HOUSE BILL 1978 FAILED TO RECEIVE A CONSTITUTIONAL MAJORITY AND WAS REFERRED TO COMMITTEE.

AMENDMENT #1
r
ewrites this bill to make the following changes to the sales and use tax exemption on qualified building materials used in the construction, expansion, or renovation of one or more qualified, new, or expanded warehouse or distribution facilities:

(1) Present law defines "qualified building materials" to mean tangible personal property purchased during the period between July 1, 2019, and December 31, 2026, that becomes part of the real property comprising the facility. This amendment adds

t
angible personal property purchased during the period between July 1, 2026, and December 31, 2032, that becomes part of the real property comprising the facility
;

(2) In order to qualify for the exemption, present law requires that
the taxpayer or a lessor, or both, makes a capital investment of at least $1,000,000,000 in the construction or renovation of
the f
acilities and related facilities at the same location within the qualified capital investment period
. Present law defines "qualified investment period" to mean
a period beginning on or after January 1, 2019, and ending no later than December 31, 2026
. This amendment adds a
period beginning on or after Janua
ry 1, 2026, and ending no later than December 31, 2032
; and

(3) To facilitate qualified taxpayers claiming an exemption under the expanded definitions in (1) and (2), this amendment establishes a new application period that will close October 1, 2026.

Current Bill Text

HOUSE BILL 1978
By White

SENATE BILL 2042
By Taylor
SB2042
011326
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 67,
Chapter 6, relative to sales and use taxes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-6-318(c)(2), is amended by
adding the following sentence at the end of the subdivision:
The commissioner may issue the certificate in paper or electronic medium.
SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it.