AN ACT to amend Tennessee Code Annotated, Title 67, relative to energy.
HB1133 amends Tennessee’s tax code to expand and clarify tax treatment for certain energy-related property and activities, with a particular focus on nuclear energy and uranium processing. The bill adds nuclear energy production facilities to a provision that previously referenced wind sources, and it creates a new sales tax exemption for machinery, equipment, parts, fluids, lubricants, repair parts, and related installation labor used primarily for uranium enrichment, deconversion, and conversion activities.
The exemption is written broadly to cover equipment used under a range of commercial arrangements, including EUP contracts, SWU contracts, UF6 contracts, conversion contracts, tolling or fee-based arrangements, and situations where title to the uranium material is held by either the owner of the equipment or the customer. The bill takes effect July 1, 2025, and is codified in Title 67, affecting state tax law rather than regulatory permitting or safety rules.
The bill changes Tennessee Code Annotated Title 67 by expanding an existing tax-related definition to include nuclear energy production facilities and by adding a new sales tax exemption for specified uranium enrichment, deconversion, and conversion machinery and related items. It also deletes an existing subdivision in Section 67-6-205(c)(7), indicating a conforming change to the state’s sales and use tax exemptions. The practical effect is to reduce tax liability for qualifying nuclear fuel-cycle and uranium-processing equipment and to support investment in nuclear energy infrastructure and related industrial operations.
The bill appears to have been generally well received in the legislative process, with strong committee support and passage at multiple stages by wide margins. The recorded votes show unanimous or near-unanimous committee recommendations and substantial floor majorities, suggesting broad bipartisan acceptance of the bill’s energy and tax policy goals. The final concurrence vote on the Senate amendment also passed comfortably, though with a notable minority of dissenting votes.
The main point of contention appears to be the scope of the tax exemption and whether Tennessee should extend preferential tax treatment to nuclear fuel-cycle activities and nuclear energy facilities. The bill’s broad language covering enrichment, deconversion, conversion, and multiple contract structures may have raised concerns about the size of the exemption, its fiscal impact, or whether it favors a specific industry. The recorded floor opposition, while not large enough to block passage, indicates some lawmakers were not fully supportive of the policy direction or the tax preference created by the bill.