Motor Vehicles, Titling and Registration

Plain English Breakdown

The official source material does not provide details on enforcement or verification mechanisms for the new exemption.

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.

What This Bill Does

• Adds an exemption for active-duty military service members who are residents of Tennessee but stationed in another state due to their orders.
• Requires these service members to provide proof of their stationing and residency status when buying a vehicle.
• Ensures that the exempted vehicles must be 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.
• Vehicle sellers and county clerks who process vehicle registrations for these service members.

Terms To Know

AGR program

The Active Guard Reserve (AGR) program, which allows National Guard or reserve military personnel to serve full-time in a civilian capacity while maintaining their status as reservists.

Combat zone

An area designated by the U.S. Department of Defense where military operations are taking place and conditions pose an unusual hardship on service members due to hostile or dangerous circumstances.

Limits and Unknowns

• The bill does not specify how the exemption will be enforced or verified.
• It is unclear what happens if a service member's orders change after purchasing a vehicle under this exemption.

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

HOUSE BILL 1801
By Vital

SENATE BILL 2629
By Gardenhire
SB2629
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.