Amends TCA Section 67-6-209.

Generally under present law:<br /> <br /> (1) Where a manufacturer, producer, compounder or contractor erects or applies tangible personal property, that the manufacturer, producer, compounder or contractor has manufactured, produced, compounded or severed from the earth, such person so using the tangible personal property must pay sales and use tax on the fair market value of such tangible personal property when used, without any deductions; and<br /> <br /> (2) When a contractor or subcontractor that is defined as a dealer for sales and use tax purposes uses tangible personal property in the performance of the contract, or to fulfill contract or subcontract obligations, such contractor or subcontractor must pay a tax at the rate prescribed for property sold at retail (currently 7 percent) measured by the purchase price of such property, unless such property has been previously subjected to a sales or use tax, and the tax due thereon has been paid. This provision applies whether the title to such property is in the contractor, subcontractor, contractee, subcontractee, or any other person, or whether the title holder of such property would be subject to pay the sales or use tax, except where the title holder is a church, private nonprofit college or university and the tangible personal property is for church, private nonprofit college or university construction. <br /> <br /> This bill adds exemption similar to the one described above in (2) for situations where the title holder is a local education agency (LEA) and the tangible personal property is for construction or maintenance needs of the LEA.<br />