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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 31, 2026 – August 2, 2026

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.
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.

Internet Tax Freedom Act Extended Until December 11, 2015

U.S. House of Representatives passed a provision to extend the Internet Tax Freedom Act until 12/11/15. More…

House Introduces Remote Transactions Parity Act of 2015

U.S. House of Representatives introduced the Remote Transactions Parity Act of 2015 on 06/15/15. More…

Tennessee Enacts New Software Exemption

Tennessee enacted a new software exemption, effective 07/01/15. More…

Tennessee Enacts Click-Through Nexus Legislation

Tennessee enacted legislation that adds a sales and use tax click-through nexus provision, effective 07/01/15. More…

Tennessee Delays SST Conformity Provisions

Tennessee delayed the effective date of certain Streamlined Sales and Use Tax Agreement conformity provisions until 07/01/17. More…

Tennessee Expands Industrial Machinery Exemption to Include Water and Wastewater Treatment

Tennessee expanded its sales and use tax exemption for industrial machinery, effective 07/01/15. More…

Senate Introduces Marketplace Fairness Act of 2015

On March 10, 2015, a bipartisan group of senators introduced the Marketplace Fairness Act of 2015.

Internet Tax Freedom Act Extended Until October 1, 2015, Permanent Extension Introduced

On December 16, 2014, President Barack Obama signed an act including a provision that extends the Internet Tax Freedom Act until October 1, 2015.

Internet Tax Freedom Act is Extended through December 11, 2014

President Barack Obama has signed federal legislation extending the Internet Tax Freedom Act through December 11, 2014.

Tennessee Expands Industrial Machinery Exemption

Effective July 1, 2014, Tennessee’s sales and use tax exemption for industrial machinery is expanded to include machinery necessary for and primarily used for the manufacture of firearms equipped with integral devices that allow a user to program the firearm…

SST Best Practices Matrix on Deal of the Day Vouchers

The Streamlined Sales and Use Tax (SST) Governing Board has issued a best practices matrix which provides answers to whether the state follows the best practices set forth in the SST Agreement regarding deal-of-the-day vouchers. All SST Member states are…

New Federal Digital Goods and Services Bill Proposed

Representative Lamar Smith (Republican, Texas) has introduced a bill to bar multiple taxes on digital goods and services. Smith had proposed an earlier bill which failed to pass. This bill is a revised version of the earlier bill. The proposed…

Tennessee Decreases Rate on Food and Food Ingredients

Tennessee has issued a notice informing taxpayers that the state sales and use tax rate on food and food ingredients decreases from 5.25% to 5%, effective July 1, 2013.(Important Notice No. 13-05, Tennessee Department of Revenue, June 2013)

Loyalty Points Treated as Coupons in Tennessee

Loyalty points issued to customers by a wireless telecommunications company are treated as in-store (retailer) coupons, for purposes of Tennessee sales and use tax. When customers redeem points for a discount on goods or services, the points act as an…

Natural Gas Used in Ovens Qualifies for Manufacturing Exemption in Tennessee

Natural gas that is used in metered ovens at a food production facility producing food for resale qualifies for the sales and use tax manufacturing exemption on gas used in a manufacturing process in Tennessee. The natural gas is used…

Tennessee Enacts Bill to Delay SST Conformity Provisions

Tennessee Governor Bill Haslam has signed legislation that delays the effective date of certain Streamlined Sales and Use Tax (SST) Agreement conformity provisions until from July 1, 2013 to July 1, 2015. The delayed provisions include sourcing rules, single article…

Freezer Racks Exempt as Industrial Machinery in Tennessee

Freezer racks used at a food production facility qualify as industrial machinery and are therefore exempt from Tennessee sales and use tax. The freezer racks qualify as equipment necessary to the taxpayer’s processing operation because they allow the taxpayer to…

Advertising Materials Printed and Distributed Outside Tennessee Not Taxable

Advertising materials that are printed outside Tennessee then subsequently shipped to Tennessee for temporary storage at a taxpayer’s distribution center before being distributed outside the state are not subject to Tennessee use tax. If the materials are shipped from the…

Consumer Financial Protection Bureau Rules State Laws are Superseded by Federal Law on Gift Cards

The Consumer Financial Protection Bureau (CFPB) ruled that unclaimed property laws in Maine and Tennessee that deem gift cards as abandoned property if not used within a certain period are preempted by federal law.

Federal Government Introduces New Remote Seller Bill

The federal Marketplace Fairness Act of 2013 was introduced in the House of Representatives and the Senate on February 14, 2013.

Containers Qualify for Machinery Exemption in Tennessee

The Tennessee Department of Revenue ruled that reusable specialty containers used to transport parts that are component parts of the item being manufactured from a storage facility to an assembly line are exempt from sales and use tax as industrial machinery.

Call Tracking Services Not Taxable in Tennessee

A taxpayer’s sales of call tracking services are not subject to Tennessee sales and use tax. The taxpayer collects and analyzes information pertaining to a retailer’s customers, advertising, and employee call handling skills. The call tracking services do not meet…

Tennessee Reduces Tax Rate on Food

Effective July 1, 2012, the sales and use tax rate applicable to food and food ingredients in Tennessee is reduced from 5.5% to 5.25%. The new law also requires that the local option sales tax, which under existing law can…

Tennessee Authorizes Disaster Relief Tax Refund

Individuals who receive disaster assistance from the Federal Emergency Management Agency (FEMA) as a result of a natural disaster happening in Tennessee can claim a refund of Tennessee sales and use tax paid on eligible items purchased to replace or…