The proposed bill aims to exempt certain aircraft and aircraft parts from state sales and use taxes in Alabama, specifically targeting gross receipts from the sale of aircraft replacement parts and components used by certified or licensed air carriers for maintenance while temporarily in the state. This new exemption will be effective from September 1, 2025, to August 31, 2030, and will not apply to county or municipal taxes unless approved by local governing bodies. Additionally, the bill provides a similar exemption for gross receipts from the sale of aircraft delivered in Alabama, provided that these aircraft will not be hubbed in the state. The bill also 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, determining that the privilege or license tax will be based on the aircraft's location when it first enters revenue service.

Moreover, the bill introduces amendments to existing laws regarding the leasing and rental of tangible personal property in Alabama, including the deletion of the reference to the "constitution of the state" and its replacement with the "Constitution of Alabama of 2022." It outlines various exemptions from sales and use tax for specific transactions, such as the leasing of nuclear fuel assemblies and vehicles for interstate commerce, while establishing criteria for aircraft not considered permanently domiciled in Alabama during the lease term. A new exemption for gross receipts from the leasing or rental of aircraft replacement parts and supplies used by certified air carriers for maintenance while temporarily in Alabama is also included, effective from September 1, 2025, to August 31, 2030, and similarly not applicable to local rental or lease taxes without local approval. The act is set to take effect on June 1, 2025.

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