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SB 1875

Taxes - As introduced, requires a person using a liquified gas propelled motor vehicle to pay the liquified gas tax on delivery of the liquified gas into the vehicle's fuel supply tank instead of prepaying the tax on an annual basis; eliminates the annual renewal requirement for the liquified gas user permit, instead making it a permanent and valid permit dependent on timely reports and remittance of taxes or until surrendered or canceled; makes other tax-related changes. - Amends TCA Title 67, Chapter 1, Part 18; Title 67, Chapter 3, Part 11 and Title 67, Chapter 6.

114th Regular Session (2025-2026)

Tennessee shifts liquified gas vehicle taxation from annual prepayment to point-of-delivery collection and replaces annual permits with permanent ones.

Signed by Senate Speaker
#taxes
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WeVote Research Nonpartisan
Bill Summary · SB 1875

Legislative bill overview

SB 1875 restructures Tennessee's liquified gas taxation system by shifting from annual prepayment to point-of-delivery taxation and replacing annual permit renewals with permanent permits. The bill modifies multiple sections of Tennessee's tax code governing liquified gas vehicle taxation and administrative requirements.

Why is this important

This change affects vehicle owners using liquified gas (LPG/propane vehicles) by altering when and how they pay taxes, potentially improving cash flow by eliminating lump-sum annual payments. It also streamlines state administration by reducing annual permit processing burdens, though the state must implement new tracking systems for delivery-point tax collection.

Potential points of contention

  • Tax collection timing and enforcement: Shifting from prepayment to point-of-delivery creates compliance challenges—the state must ensure taxes are collected at fuel stations rather than relying on vehicle owners' annual remittance, potentially requiring new infrastructure or monitoring protocols
  • Revenue certainty: Point-of-delivery collection depends on accurate reporting from fuel distributors; any gaps in compliance could reduce state tax revenue compared to the previous prepayment model
  • Permanent permit implications: While eliminating renewal hassles, permanent permits tied only to "timely reports and remittance" may create disputes about when cancellation is warranted and could complicate permit status verification

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

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