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SJR 81

Naming and Designating - Designates October 2 as "School Custodian Day" in Tennessee. -

114th Regular Session (2025-2026) Introduced by Paul Bailey

Allows the legislature to create state tax exemptions for a portion of the market value of tangible business property used to produce income.

Passed on Second Consideration, refer to Senate Education Committee
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Bill Summary · SJR 81

Summary — SJR 81

Proposing a constitutional amendment to authorize the legislature to exempt from ad valorem taxation a portion of the market value of tangible personal property a person owns that is held or used for the production of income.

Main purpose / intent

SJR 81 is a joint resolution proposing a state constitutional amendment to give the legislature explicit authority to create one or more ad valorem (property) tax exemptions that would apply to a portion of the market value of tangible personal property used to produce income. In short, the resolution would permit the legislature to exempt part of the taxable value of business personal property (e.g., equipment, machinery, inventory, furniture) when that property is held or used to generate income.

The resolution itself does not create a tax exemption or specify its size, eligible property classes, or implementation details; it only amends the constitution to authorize the legislature to enact such statutory exemptions in the future.

Key provisions / what the amendment would change

  • Amends the state constitution to authorize the legislature to exempt from ad valorem taxation a portion of the market value of tangible personal property that is owned by a person and held or used for the production of income.
  • Leaves all substantive details (what portion of value, which property types, eligibility rules, effective dates, phase-ins, valuation methods, limits, and administration) to subsequent legislative action (statute and implementing rules).
  • Does not itself change current tax law or immediately grant tax relief.

Who or what would be affected

  • Primary beneficiaries (potential): Owners of tangible personal property used to produce income — generally businesses that own equipment, machinery, inventory, furniture, fixtures, etc. Specific eligibility and benefit levels would depend on later statutes.
  • Local taxing units (counties, cities, school districts, special districts): Could experience reductions in taxable value and corresponding property tax revenue if the legislature enacts exemptions using this authority.
  • Appraisal districts and tax administrators: Would need to adjust appraisal and exemption processes if and when statutory exemptions are adopted.
  • Other taxpayers and state fiscal actors: Revenue reductions at the local level could prompt shifts in tax burdens, adjustments to tax rates, or changes in state funding formulas depending on the structure and scope of any exemptions adopted.

Procedural status & timeline

  • Filed: March 14, 2025
  • Committee activity: Considered and reported favorably (committee hearing on 3/27; report printed 3/31).
  • Senate: Read and passed (3 readings and passage recorded) on April 9, 2025.
  • Transmitted to the House: Received April 10, 2025.
  • House action: Read first time April 17, 2025; referred to the House Ways & Means Committee on April 17, 2025.
  • Companion bill: HJR 211 (House companion).

As a proposed constitutional amendment, SJR 81 must be approved by the required legislative majority (procedure for proposing amendments) and then submitted to voters in a statewide election. If a majority of voters approve the amendment, the constitution would be changed to permit the legislature to enact the described exemption authority; actual tax relief would require subsequent legislative enactment.

Potential fiscal and policy implications (high level)

  • If the legislature later enacts exemptions under this authority, local property tax revenue could decline depending on exemption breadth and values exempted. That could affect local government and school district budgets or require changes in tax rates or state funding.
  • Could reduce business property tax burdens, potentially encouraging investment or lowering operating costs for affected businesses.
  • Equity and distributional effects would depend on how exemptions are targeted (size of businesses, property classes, caps, etc.).

Note: SJR 81 is an enabling constitutional change. Specific fiscal impacts cannot be quantified until the legislature adopts implementing statutes that set exemption details.

Compiled from official sources — confirm details with the bill’s official record.

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