The bill HB253 proposes significant amendments to Alabama's tax code, specifically targeting the sales and use tax exemptions for aircraft and aircraft parts. It introduces new legal language that exempts gross receipts from the sale and lease of aircraft replacement parts and components used by certified or licensed air carriers, provided the aircraft is not permanently domiciled in Alabama. This exemption is set to 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.

Moreover, the bill makes a notable deletion by replacing the reference to the "constitution of the state" with the "Constitution of Alabama of 2022." It also 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. The bill further clarifies conditions under which an aircraft is not considered permanently domiciled in Alabama, such as the location of the aircraft's primary base or the purchaser's headquarters. Overall, HB253 seeks to enhance tax exemptions related to aviation leasing and rental transactions 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