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HB 1978

Taxes, Sales - As introduced, authorizes the commissioner of revenue to issue a certificate of exemption to a taxpayer who qualifies for 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 in paper or electronic medium. - Amends TCA Title 67, Chapter 6.

114th Regular Session (2025-2026)

Tennessee bill exempts sales tax on building materials for new/expanded warehouse and distribution facilities through commissioner-issued certificates.

Sponsor(s) Added.
#sales #taxes
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Bill Summary · HB 1978

Legislative bill overview

HB 1978 allows Tennessee's revenue commissioner to issue sales tax exemption certificates for building materials used in constructing, expanding, or renovating warehouse and distribution facilities. The exemption applies to qualified new or expanded facilities and can be issued in paper or electronic form.

Why is this important

Sales tax exemptions on construction materials represent foregone state revenue, directly affecting the budget available for public services. The bill is designed to incentivize warehouse and distribution facility development in Tennessee, potentially creating jobs and economic activity, but at a measurable fiscal cost.

Potential points of contention

  • Revenue impact unclear: The bill doesn't specify criteria for what qualifies as a "qualified" facility, making it difficult to estimate how much tax revenue will be lost or which projects receive benefits
  • Selective incentive: Warehouse/distribution facilities receive preferential treatment while other industries (manufacturing, retail, etc.) do not, raising questions about fairness and whether this is the most effective use of tax incentives
  • Administrative burden: Creating a certification process adds complexity to revenue administration and creates potential for disputes over eligibility determinations

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

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