The bill proposes to exempt gross receipts from the sale and lease of certain aircraft and aircraft parts from state sales and use tax in Alabama. It introduces new legal language that specifically exempts gross receipts from the sale of aircraft replacement parts and components used by certified or licensed air carriers, provided the aircraft is not permanently domiciled in Alabama. The exemptions will be effective from September 1, 2025, to August 31, 2030, and will not apply to county or municipal sales or use taxes unless approved by local governing bodies. Additionally, the bill amends Sections 40-12-222 and 40-12-223 of the Code of Alabama 1975 to clarify the application of rental or lease taxes to commercial aircraft and to exempt gross receipts from the lease of certain aircraft parts.

Furthermore, the bill specifies that the privilege or license tax on commercial aircraft will be determined based on the aircraft's location when it first enters revenue service, aiming to streamline the taxation process. It also includes nonsubstantive revisions to update existing code language for clarity and consistency. Notably, the bill deletes the reference to the "constitution of the state" and replaces it with the "Constitution of Alabama of 2022." Overall, HB253 seeks to clarify and expand tax exemptions related to leasing and rental transactions in the aviation sector while ensuring compliance with local tax regulations.

Statutes affected:
Introduced: 40-12-222, 40-12-223, 40-23-2, 40-23-61, 40-23-2, 40-23-61, 40-12-222
Engrossed: 40-12-222, 40-12-223, 40-23-2, 40-23-61, 40-23-2, 40-23-61, 40-12-222
Enrolled: 40-12-222, 40-12-223, 40-23-2, 40-23-61, 40-23-2, 40-23-61, 40-12-222