Committee advances bill letting local governments opt to exempt inventory from ad valorem tax

Senate Bill 2995, explained to the committee by Senator Johnson, would allow local governments to opt to exempt raw materials and work‑in‑progress inventory from ad valorem taxes rather than requiring them to be taxed, Johnson said.

"This bill would allow for local governments to, choose to exempt, raw materials and work in progress inventory from ad valorem taxes. It does not make it mandatory and it is completely up to the local government on whether they choose to exempt that," Johnson said, describing the measure as an optional local tool to help businesses that hold inventory for extended periods.

Johnson cited DeSoto County and its concentration of warehouses serving FedEx and Memphis as an example of where the exemption could be attractive to businesses that store inventory for long periods. When Senator Pope asked whether an exemption would be applied on a case‑by‑case basis or would have to apply across a business type, Johnson replied, "That's a great question. My understanding is that it is is case by case, but I will verify that with for you. Thank you." The transcript records no follow‑up verification.

The committee adopted a motion titled "sufficient due pass" on the bill; the chair announced, "The ayes have it," and the bill was reported out of committee. The transcript does not show a roll‑call vote or the exact vote tally.

The measure, as described, would give a local elected body discretion to adopt an exemption; the transcript does not include proposed statutory text, effective date, or fiscal estimate beyond examples offered by the sponsor.