SB175 Alabama 2025 Session

Updated Feb 23, 2026

Notable

Summary

Primary Sponsor: Wes KitchensSenator
Republican
Session: 2025 Regular Session
Title: Taxation; certain aircraft and aircraft parts are exempt from sales, use, and lease taxes
Summary: SB175 would create temporary exemptions from Alabama state taxes for certain aircraft and aircraft parts, expand local exemption options, and adjust how taxes apply to commercial aircraft leases and hub operations, with exemptions available from 2025 through 2030.
What This Bill Does
The bill would exempt from state sales and use tax the gross receipts from selling aircraft parts and related items used on aircraft brought into Alabama for maintenance or conversion, under certain domicile and carrier conditions. It would also exempt from state lease or rental tax the gross receipts from leasing or renting aircraft parts, and allow municipalities and counties to exempt these purchases from local taxes with their approval. In addition, it creates rules for taxing commercial aircraft leases, clarifies how the tax is determined for aircraft delivered in Alabama that are not hubbed there, and enacts temporary exemptions for these transactions from Sept 1, 2025 to Aug 31, 2030, while making nonsubstantive code revisions. The bill also amends related tax statutes to codify these exemptions and the treatment of aircraft and related equipment.

Who It Affects
Airlines, aircraft owners/lessors, and maintenance providers involved with aircraft and aircraft parts in Alabama, who would benefit from state (and potentially local) tax exemptions on purchases and leases related to aircraft and their parts during the exemption period.
Local governments in Alabama (counties and municipalities), which could grant their own exemptions from local sales, use, and rental/lease taxes for these aircraft-related transactions with approved resolutions or ordinances.

Key Provisions
Exemption from state sales and use tax on gross receipts from sale of aircraft replacement parts, components, systems, sundries, and supplies used on or affixed to aircraft brought into Alabama for maintenance or conversion, with domicile conditions and a sunset window of Sept 1, 2025 through Aug 31, 2030.
Exemption from state lease or rental tax on gross receipts from leasing or renting certain aircraft parts, with local exemption authority for counties and municipalities via approved action, and a sunset window through 2030.
Exemption from state sales and use tax on the sale/delivery of aircraft delivered in Alabama and used by carriers not hubbed in Alabama, subject to domicile conditions and local approval for any local taxes, with a 2025–2030 sunset.
For commercial aircraft leases, tax liability would be based on the aircraft’s location when first entered into revenue service, and the bill provides detailed rules for determining tax in various leasing scenarios, including hub operations.
Amendments to existing code (Sections 40-12-222 and 40-12-223) to reflect these exemptions and to clarify how leasing taxes apply to aircraft and related equipment, with additional exemptions and conditions for hub operations and special cases.
Effective date of June 1, 2025.

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 & Revenue