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Tennessee Sales Tax

On this page you will find handy sales and use tax information about Tennessee.

How to use this page:

We’ve pulled in the information from all our Charts for a consolidated view by state.  Here you can see the sales tax rates and if the state has remote seller nexus rules. You can also see any sales tax holidays or amnesty programs that may exist, though these do not apply to all states.

Below the chart you can find any News & Tip item we have published that relates to Tennessee that you can filter by topic. This will help you get informed on current and past legislation that has passed in the state.

State Sales Tax Rates
State Rate

7.000% The state has reduced rates for sales of certain types of items.
Range of Local Rates

1.5% – 2.75%  A cap on the local sales/use tax applies on sales of any item of tangible personal property.
Local Rates Apply to Use Tax

Yes
Remote Seller Nexus Rules
CLICK-THROUGH NEXUS

7/1/2015
AFFILIATE NEXUS

1/1/2014
REPORTING REQUIREMENTS

3/26/2012
ECONOMIC NEXUS

10/1/2019
MARKETPLACE NEXUS

10/1/2020
Sales Tax Holidays
Annual Back to School Holiday

July 28-30, 2023

1. Clothing with a sales price of $100 or less
2. School supplies with a sales price of $100 or less
3. Computers with a sales price of $1500 or less

Visit the Tennessee Department of Revenue web page for more information.
Gun Safes and Gun Safety Equipment Devices Sales Tax Holiday

July 1, 2022 - June 30, 2023

  1. Gun safes: defined as a locking container or other enclosure equipped with a padlock, key lock, combination lock, or other locking device that is designed and intended for the secure storage of one or more firearms.
  2. Gun safety device: defined as any integral device to be equipped or installed on a firearm that permits the user to program the firearm to operate only for specified persons designated by the user through computerized locking devices or other means integral to and permanently part of the firearm.

Visit the Tennessee Department of Revenue webpage for more information.
Food and Ingredients Sales Tax Holiday

August 1 – October 31, 2023

Food and food ingredient items purchased during this period are tax free except items purchased from a vending machine or micro market.
Sales Tax Amnesty
Status

Active

Amnesty Filing Dates

October 1, 2005 - 12 months after becoming full member of SST

Go to Tennessee Amnesty Page
AMNESTY INCLUSION PERIODS

All periods prior to date of amnesty application.

TAX TYPES AND CONDITIONS

Business Sales and Seller’s Use Tax under SSTP Program if register under SSTP.
AMNESTY BENEFITS

Waiver of all tax, penalty and interest.

Administration Information
Streamlined Sales Tax Status

Associate Member
NUMBER OF TAXING AUTHORITIES

126 Sales Tax Jurisdictions

HOME RULE AUTHORITIES

N/A
Sales Tax Sourcing (Intrastate)

Origin
Sales Tax Return Due Date

The 20th of the month following the reporting period
Exemption Information
RESALE CERTIFICATE

Tennessee Resale Certificate
TYPES OF EXEMPTIONS

Product types of exemptions: manufacturing, agricultural, resale, gasoline, textbooks, school meals, numerous health care products

 

Entity types of exemptions: purchases by government entities and non-profit organizations

 

Tennessee Exemption Certificate Forms
State Links
State Tax Web Page

Tennessee Department of Revenue
Rate Look-Up Page

Tennessee Sales Tax Rate Look-Up
Registration Link

Register for Tennessee Sales Tax
History & Fun Facts
HISTORY

  • Tennessee enacted its retail sales and use tax in 1947.
  • Tennessee amended its laws to become an Associate Member State with the Streamlined Sales and Use Tax Agreement in 2003, 2005, and 2007. An Associate Member State is one that has achieved substantial compliance with the terms of the SSUTA but not necessarily each provision required.
FUN FACTS
  • In 2005, Tennessee began collecting tax revenue from a so called “crack tax” on illegal substances that drug dealers can report without fear of prosecution and raked in over a million dollars. The Tennessee Court of Appeals ruled it unconstitutional in 2007.

Tennessee Appeals Court Supports Chancery Court in Overturning Revocation of Manufacturing Exemption

On September 6, 2023, the Tennessee Appeals Court at Nashville issued a majority ruling upholding the Chancery Court’s decision in the case Alsco, Inc. v. Tennessee Department of Revenue, number M2022-01019-COA-R3-CV.

Staffing and Payment Processing Services Provided Through Digital Platform are Not Taxable in Tennessee

Staffing augmentation and payment processing services provided by an out-of-state technology company are not subject to sales and use tax in Tennessee.

Tennessee Rules Membership Fees from Online Exercise Classes Are Taxable

The Tennessee Department of Revenue ruled that membership fees charged from a home exercise equipment company are subject to the state’s sales and use tax.

Tennessee Updates Definition of Industrial Machinery for Sales Tax Exemption

Effective July 1, 2023, Tennessee has enacted legislation that amends the state’s definition of “industrial machinery” for purposes of the state’s industrial machinery exemption.

Tennessee Passes Legislation Regarding Taxing Temporary Services

Companies doing business in Tennessee and seeking the aid of temporary workers should carefully review job postings, with the understanding that other than this in-house exemption, the services of individuals related to software may be taxed.

Tennessee Issues Letter Ruling Clarifying Advertising Services vs Computer Software

Tennessee issued a letter ruling stating tax should be paid on a subscription-based product which allows users to create and manage advertisements for rental properties.

Tennessee Letter Ruling on Data Processing Service

Tennessee issued a letter ruling clarifying that a company headquartered within Tennessee is not subject to Tennessee sales and use tax.

Tennessee Releases Guidance for Upcoming New Farm Equipment Exemption

The Tennessee Department of Revenue has released guidance on the application of the state\’s revised farm equipment sales and use tax exemption that will come into effect on January 1, 2023.

Streamlined Sales Tax Member States Submit New Certificates of Compliance and Update Tax Administration and Taxability Matrices for 2022

All Streamlined Sales Tax Agreement member states have now submitted their 2022 updated certificates of compliance, tax administration practice matrices, and updated library of definitions.

Drugs Sold for Clinical Trials are Free from Sales and Use Tax in Tennessee

In a letter ruling approved by David Gerragano the Commissioner of Tennessee department of Revenue on June 16th, 2022, it was determined that drugs sold in relation to a clinical trial are exempt from sales and use tax.

Tennessee allows a deduction of sales tax to compensate registered vendors and dealers

A summary of Senate Bill 500 by the Tennessee Department of Revenue explains that dealers are allowed a deduction equal to 2 percent of the state sales tax due, not to exceed $25 per return.

Tennessee rules marketplace facilitator fees are not subject to sales tax

The Tennessee Department of Revenue confirmed that marketplace facilitator fees for connecting buyers and sellers and processing payments are nontaxable in a private letter ruling approved in April 2022.

State Notices & Resources for Remote Sellers

Use this state by state guide to find each state\’s initial guidance on how to proceed post-Wayfair, state resources such as FAQs, and any state activity such as going through a legislative process that impacts remote sellers.

Tennessee Exempts Industrial Machinery Used in Quarries from Sales Tax

The Tennessee Department of Revenue ruled that industry machinery used in quarries where raw materials are mined is exempt from sales and use taxes.

Tennessee Repeals Rule Regarding Drop Shipments

After the repeal of Rule 96, Tennessee suppliers can accept resale certificates issued by other states or the Streamlined Sales and Use Tax Exemption Certificate.

Tennessee Aircraft Repair Sales Tax Exemptions

The Tennessee Department of Revenue determined in a letter ruling that some aircraft repairs are exempt from sales tax in the state.

Tennessee Rules Online Cloud-Based Platforms Not Taxable

The Tennessee Department of Revenue ruled that a company with two offerings on a cloud-based platform are nontaxable.

Economic Nexus State by State Chart

Key information such as effective dates, thresholds, and includable sales for out-of-state sellers making sales into states that have enacted economic nexus legislation both before and after the South Dakota v. Wayfair Supreme Court decision.

Sales Tax Holiday Season is Here

With sales tax holiday season right around the corner, now is a good time to look at how sales tax holidays work and examine the different types of holidays that states offer.

Tennessee One Year Sales Tax Holiday on Gun Safety Devices Begins

Effective from July 1, 2021 until June 30, 2022, Tennessee will have a sales tax holiday exempting retail sales of gun safes and gun safety devices from tax.

Tennessee Taxpayers May Request Refunds Directly From the State

Effective October 1, 2021, Tennessee taxpayers can now go directly to the state to request sales tax refunds after contacting the dealer first.

Tennessee Governor Signs New Law Providing Sales and Use Tax Exemption to Certain Online Continuing Education Courses

Tennessee’s new law signed by the Governor provides a sales and use tax exemption for online access to qualified continuing education courses.

Tennessee Enacts Exemption for Certain Film Productions

Tennessee has enacted a sales and use tax exemption for qualified film or television production costs provided the Commissioners of Revenue and Economic and Community Development determine that the exemption is in the best interests of the state (such as jobs created or community impact).

Post-Wayfair Remote Seller Nexus: What’s Going on in the Southeast?

Like the rest of the country, the Southeast region of the U.S. is not immune to the changes created by the South Dakota v. Wayfair decision. In fact, 2020 presented a slew of changes in the southeast that have big…