2023 Tennessee Code › Title 67 - TAXES AND LICENSES (§§ 67-1-101 — 67-10-107) › Chapter 6 - SALES AND USE TAXES (§§ 67-6-101 — 67-6-907) › Part 3 - EXEMPTIONS (§§ 67-6-301 — 67-6-396) › Section 67-6-313 - Interstate commerce - Repair services - Tax credit

(a)
It is not the intention of this chapter to levy a tax upon articles of tangible personal property imported into this state or produced or manufactured in this state for export.
(b)
There is exempt from the sales and use tax repair services, including parts and labor, with respect to qualified tangible personal property, where such services are initiated or completed, or both, by a repair person within this state, and where such property, after having repair services performed on it, is delivered or shipped outside this state. "Qualified tangible personal property" includes machinery, apparatus and equipment, with all associated parts, appurtenances and accessories, that is necessary for:
(1)
Extracting or removing any natural resources, including, but not limited to, that which is necessary for mining or logging endeavors;
(2)
Building or improving roads or highways;
(3)
Land clearing or excavation, or commercial or residential construction; or
(4)
Loading and unloading of containers or truck trailers on and off rail cars, ships, barges or aircraft.
(c)
(1)
There is exempt from the sales and use tax all repair service labor performed with respect to aircraft engine equipment and aircraft mainframes, where the repair services on such aircraft engine equipment or aircraft mainframes are initiated, performed or completed in repair facilities within this state.
(2)
For the purposes of this subsection (c):
(A)
"Aircraft engine equipment" means any aircraft engine, including all associated parts, appurtenances and accessories, for the propulsion of aircraft used by a commercial interstate or international air carrier;
(B)
"Aircraft mainframes" means any aircraft body, wing, tail assembly, aileron, rudder, landing gear, engine housing, and any other assembly or component integral to the aerodynamic structure of aircraft used by a commercial interstate or international air carrier; and
(C)
"Repair service labor" includes all labor performed in connection with the repair, maintenance, overhauling, rebuilding, or modifying of aircraft engine equipment or of aircraft mainframes together with any test or inspection necessary or appropriate thereto.
(d)
There is exempt from the sales and use tax repair services, including parts and labor, to equipment used primarily in interstate commerce, where such repairs are performed outside of Tennessee and the original purchase of such equipment was exempt from sales and use tax.
(e)
There is exempt from the sales and use tax all repair parts and labor performed on fire protection machinery, apparatus, and equipment, with all associated parts, appurtenances, and accessories owned by fire departments in states other than Tennessee.
(f)
In order to prevent actual multistate taxation of the acts and privileges subject to tax under this chapter, any taxpayer, upon proof acceptable to the commissioner being submitted that the taxpayer has properly paid sales and use tax in another state on such acts and privileges, shall be allowed a credit against the tax imposed by this chapter to the extent of the amount of such tax properly due and paid in another state.
(g)
(1)
There is exempt from the sales and use tax all repair service labor performed with respect to railroad rolling stock, where the repair services on such railroad rolling stock are initiated, performed or completed in repair facilities located within this state.
(2)
As used in this subsection (g):
(A)
"Railroad rolling stock" means all railroad equipment, operating on flanged wheels, that is currently being used, or is reasonably intended to be used, principally in interstate commerce; and
(B)
"Repair service labor" means labor performed with respect to the repair, maintenance, overhauling, rebuilding, modifying or adapting of railroad rolling stock, together with any test or inspection necessary or appropriate thereto. Such exemption does not apply to repair service labor performed by non-Class 1 railroad companies on Class 1 railroad rolling stock.
(h)
(1)
There shall be exempt from the sales and use tax the following:
(A)
Sales of helicopters or airplanes and related equipment within Tennessee to purchasers who are not residents of the state, where such helicopters or airplanes and related equipment are intended to have a situs out of Tennessee, are in fact removed from Tennessee, within thirty (30) days from the date of their purchase;
(B)
Repair and refurbishment services within Tennessee with respect to helicopters and helicopter components and parts that have their situs outside of Tennessee and are removed from Tennessee within fifteen (15) days from the completion of such repair and refurbishment services. ''Repair and refurbishment services'' as used in this subdivision (h)(1)(B) and in subdivisions (h)(1)(C) and (D) includes, but is not limited to, modifications, conversions, and installations;
(C)
In addition to the exemptions in subdivisions (h)(1)(A) and (B), sales of helicopters and related equipment within Tennessee to purchasers who are not residents of the state, where such helicopters and related equipment are intended to have a situs out of Tennessee, and where such helicopters and related equipment remain within Tennessee following such sale solely for purposes of repair and refurbishment services, and are in fact removed from Tennessee within fifteen (15) days from the completion of such repair and refurbishment services; and
(D)
Repair and refurbishment services within Tennessee with respect to airplanes and airplane components and parts which have their situs outside of Tennessee and are removed from Tennessee within thirty (30) days from the completion of such repair and refurbishment services when such repair or refurbishment services with respect to such airplanes or airplane components or parts are:
(i)
Performed pursuant to and by the registered owner of one (1) or more "supplemental type certificates" issued by the federal aviation administration; or
(ii)
Performed pursuant to and by an authorized service facility designated by an original equipment manufacturer for such service with respect to aircraft qualifying as "transport category aircraft" under 14 CFR, parts 25, 29, 91 and 121.
(2)
As used in this subsection (h), "helicopter" means an aircraft that derives its lift from blades that rotate about an approximately vertical central axis and that can hover in a stationary position while in flight and move laterally or longitudinally from the hover position.
(i)
There is exempt from the sales and use tax the sale of all repair parts, accessories, materials and supplies to a common carrier for use on the purchasing carrier's freight motor vehicles with a maximum gross weight rating classification of Class One or above under §
55-4-113
, or trailers, semi-trailers and pole trailers, as defined in §§
55-1-105
and
55-4-113
, and that are shipped via the purchasing carrier under a bill of lading and transported to a destination outside of this state for use outside this state, where the seller and the purchasing carrier are affiliated with one another such that:
(1)
Either corporation directly owns or controls one hundred percent (100%) of the capital stock of the other corporation; or
(2)
One hundred percent (100%) of the capital stock of both corporations is directly owned or controlled by a common parent.
(j)
There is exempt from sales and use tax, computer media exchange services, where the resulting media is shipped out of Tennessee or to a government agency or nontaxable entity located within Tennessee. "Media exchange services" means the process of transferring stored data from one (1) type of storage medium to another type of storage medium, including, but not limited to, magnetic tapes, magnetic cartridges, CD-ROM, magnetic disks/diskettes, laser disks/diskettes, optical disks/diskettes, or any similar media that is used to store or transfer data from one (1) computer to another.
(k)
(1)
There is exempt from the sales and use tax all repair and refurbishment service labor performed with respect to large aircraft mainframes, large aircraft engine equipment, and large aircraft accessories, when the repair and refurbishment services on the mainframes, equipment, and accessories are initiated, contracted, performed, or completed in or by an authorized large aircraft service facility, including, but not limited to, repair and refurbishment service labor performed by an authorized large aircraft service facility pursuant to the terms of guaranty, warranty, or service contracts.
(2)
In addition to the exemptions provided in subdivisions (h)(1) and (k)(1), there is exempt from the sales and use tax all sales, leases, and purchases of large aircraft and related equipment, and their use, storage, or consumption within this state following the sale, lease, or purchase, when the large aircraft and related equipment have or are intended to have a situs outside of this state following the sale, lease, or purchase, and when the large aircraft and related equipment are in and remain within this state following the sale, lease, or purchase solely for purposes of repair and refurbishment services by an authorized large aircraft service facility, and are in fact removed from this state within fifteen (15) days from the completion of the repair and refurbishment services.
(3)
As used in this subsection (k):
(A)
"Authorized large aircraft service facility," "large aircraft," "large aircraft accessories," "large aircraft engine equipment," "large aircraft mainframes," and "repair and refurbishment services" have the same meanings as defined in §
67-6-302
;
(B)
"Large aircraft and related equipment" means a large aircraft consisting of a large aircraft mainframe and large aircraft engine equipment, including any large aircraft accessories associated with the large aircraft or aircraft engine, whether installed or uninstalled; and
(C)
"Repair and refurbishment service labor" means all labor performed in connection with repair and refurbishment services.
Amended by 2021 Tenn. Acts, ch. 285, s 2, eff. 4/30/2021.
Amended by 2019 Tenn. Acts, ch. 157, s 1, eff. 4/23/2019.
Acts 1947, ch. 3, § 4; C. Supp. 1950, § 1248.56 (Williams, § 1328.25); T.C.A. (orig. ed.), § 67-3007; Acts 1985, ch. 420, § 1; 1986, ch. 518, § 1; 1986, ch. 805, § 1; 1987, ch. 294, § 1; 1987, ch. 433, § 1; 1989, ch. 312, § 6; 1989, ch. 430, § 3; 1993, ch. 318, § 1; 1995, ch. 80, § 1; 1996, ch. 807, § 1; 1997 , ch. 209, § 1; 1997 , ch. 238, § 1; 2003 , ch. 357, § 80; 2004, ch. 724, § 1; 2004, ch. 959, §§ 10, 68; 2005, ch. 311, §§ 1, 2; 2007 , ch. 602, §§ 51, 149; 2009 , ch. 530, § 35; 2011 , ch. 72, § 1; 2012, ch. 1078, § 1; 2013 , ch. 480, § 1; 2015 , ch. 48, §§ 1 - 2; 2015 , ch. 273, § 3; 2015 , ch. 506, § 2.