Tennessee Senate Bill SB1465

Tennessee 2025-2026 Regular Session

• Introduced: 10/7/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 6, relative to the taxation of labor performed on tangible personal property.

Summary

SB1465 revises Tennessee’s sales tax rules for labor performed on tangible personal property. The bill removes language that currently treats certain labor or service costs as part of the taxable sales price, deletes one existing subdivision in the definition section, and adds a new provision stating that labor and service costs—including repair and installation labor charges—are taxable when they are separately stated on an invoice or similar billing document provided to the purchaser. The bill also makes conforming changes to related sales tax statutes in Title 67, Chapter 6, including deleting specific exemptions or exclusions and renumbering remaining provisions. It takes effect immediately for rulemaking purposes and for all other purposes on July 1, 2026, giving the Department of Revenue time to implement any needed administrative rules and guidance.

Impact

This bill would change the tax treatment of labor associated with tangible personal property by clarifying when repair and installation labor charges are included in the taxable base. It amends Tennessee Code Annotated sections governing the definition of sales price and related exclusions, which would affect retailers, repair businesses, installers, and consumers who receive invoices with separately stated labor charges. The practical effect is to broaden or clarify the circumstances under which labor is subject to sales tax, while also aligning related statutory provisions with the revised definition.

Sentiment

There is limited recorded legislative discussion or voting history available for SB1465, so no strong committee or floor sentiment can be inferred from transcripts or votes. Based on the bill text, the measure appears technical and administrative in nature, aimed at clarifying tax administration rather than making a broad policy shift. The absence of recorded opposition or support in the provided materials suggests the bill was not accompanied by notable public debate in the available record.

Contention

The main point of potential contention is the taxability of labor charges, especially repair and installation labor that is separately itemized on customer invoices. Businesses that perform labor on tangible personal property may view the bill as increasing tax collection obligations or raising costs for consumers, while tax administrators may support it as a clarification that reduces ambiguity. Any disagreement would likely center on whether separately stated labor should be taxed and how broadly the new definition should apply across service and repair transactions.