HB20 Alabama 2022 Session

Summary

Primary Sponsor

Paul W. LeeRepresentative

Republican

Session

Regular Session 2022

Title

Sales and use tax, military aircraft parts, exemption extended, Sec. 40-23-4 am'd.

Summary

HB20 extends the state sales tax exemption for military aircraft parts and removes the option to renew that exemption by joint resolution after May 30, 2027.

What This Bill Does

HB20 amends Section 40-23-4 to continue the exemption on gross receipts from sales of parts, components, and systems that become part of certain military aircraft, including aircraft not domiciled in Alabama, during conversion, reconfiguration, or maintenance. The exemption applies when the FAA registration address is outside Alabama. It sets a sunset so new contracts or projects entered after May 30, 2027 would not receive the exemption unless the Legislature passes new legislation to continue or reinstate it, while past contracts remain exempt through May 30, 2030. It also removes the ability to extend exemptions by joint resolution, making such extensions void, and notes that local tax exemption would require local law or resolution to apply.

Who It Affects

• Aircraft manufacturers, maintenance/repair providers, air carriers, and other buyers purchasing parts and systems for military aircraft that are not domiciled in Alabama, who would benefit from the state sales tax exemption on these purchases.
• Local governments and taxpayers in Alabama, since the exemption may not apply to local sales taxes unless local laws or resolutions specifically provide the exemption.

Key Provisions

• Extends the state sales tax exemption for gross receipts from sale of parts, components, and systems that become part of certain military aircraft, including during conversion or maintenance, for aircraft not domiciled in Alabama.
• Adds a sunset: new contracts entered after May 30, 2027 require new legislative action to continue the exemption; past contracts remain exempt through May 30, 2030.
• Deletes language allowing extension of the exemption by joint resolution; Section 2 prohibits extending exemptions via Joint Resolution.
• Effective date: immediately upon the governor's approval.
• Local tax note: exemption may not apply to local sales taxes unless locally exempted by law or resolution.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation