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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.

Tennessee Allows Tax Refund for Storm and Tornado Shelter Building Supplies

Purchasers of building supplies used to construct storm or tornado shelters are able to claim a refund of Tennessee sales and use tax paid on the items. The items must be purchased between July 1, 2011 and December 31, 2011,…

SEC Filing Service Subject to Tennessee Sales Tax

The services of a taxpayer that obtains financial information from its customers, converts it into a compliant file then transmits the file electronically to the U.S. Securities and Exchange Commission (SEC) are subject to Tennessee sales and use tax as…

Tennessee Implements Amazon Agreement

Although the bill was geared towards an agreement with Amazon, the exclusion from tax collection responsibilities will apply to any other business that meets the requirements under the legislation.

Activities of Teachers Creates Tennessee Nexus for Bookseller

The activities of schools and teachers in Tennessee are sufficient to create sales and use tax nexus for a mail-order bookseller that sells books through marketing materials distributed in schools. Reversing the lower court’s awarding of summary judgment to dismiss…

Use of Online Software in Tennessee Not Taxable

The Tennessee Department of Revenue has issued a letter ruling stating that the monthly fee charged by an out-of-state software vendor to Tennessee taxpayers for online access to customer relationship management (CRM) software is not subject to Tennessee sales and…

In-State Warehouse or Distribution Facility in Tennessee Creates Nexus

The Tennessee Attorney General has issued an opinion stating that a retailer that directly maintains or owns a warehouse or distribution facility in Tennessee has nexus in the state for Commerce Clause purposes. If a subsidiary of the retailer owns…

Tennessee Court Rules on Exemption for Contract Employees

The Tennessee Court of Appeals addressed a taxpayer’s challenge to the Department of Revenue on an assessment of sales taxes assessed on technical staffing services. The taxpayer is in the business of providing information technology professionals to clients for use…

Taxability of Farm Trailers Discussed in Tennessee

The Tennessee Attorney General has issued an opinion concerning the taxability of farm trailers. Trailers purchased by famers may be exempt from sales and use tax if used on a farm more than 50% of the time for the purpose…

Tennessee Taxability of DSL Services Discussed

The Tennessee Department of Revenue has issued a letter ruling explaining the taxability of DSL services. The letter clarified that the state does not impose sales and use tax on the retail sales of DSL Internet access services that are…

Tennessee Business Software and Digital Products Taxable

Effective January 1, 2009, leases and rentals of computer software that are and element of an established business’ operations as well as the retail sales and leases of digital movies, books and other works are taxable in Tennessee. (Tennessee Senate…

Tennessee Court Exempts Staff Augmentation Services

A taxpayer in the business of furnishing temporary information technology workers to clients was not liable for Tennessee sales and use tax. Since the contract employees worked under the direction, supervision, and complete control of the client, the “in-house software…

Tennessee Imposes Taxes on Sales of Certain Software/Services, Digital Products

Effective June 5, 2008, the sales price of leased or rented computer software will be taxable where the lease or rental is a part of, or incidental or relevant to, a regularly established business. Additionally, computer software repair and installation…

Tennessee Leases & Rental Change Discussed

Effective January 1, 2008, Tennessee has amended the definition of a lease or rental for sales and use tax purpose in accordance with requirements under the Streamlined Sales and Use Tax Agreement. The amended definition does not include transfers of…

Tennessee Crates Not Exempt As Packaging Materials

The Tennessee Department of Revenue issued Revenue Ruling No. 08-19, in response to a taxpayer’s inquiry as to whether or not leases or rentals of crates used for transporting packaged food products are subject to sales and use tax. The…

Tennessee Food Rate Reduced

Effective January 1, 2008, the Tennessee Department of Revenue has reduced the sales and use tax rate on sales of food and food ingredients from 6% to 5.5%. (Important Notice No. 07-14, Tennessee Department of Revenue

Tennessee Announces March Tax Holiday

The Tennessee Department of Revenue has announced one-time sales tax holiday from Friday, March 21, 2008 through Sunday, March 23, 2008. Qualified items exempt from sales and use tax include: 1) clothing costing $100 or less per item; 2) school…

Tennessee Exemption for State and Federally Chartered Credit Unions

A notice has been released by the Tennessee Department of Revenue to provide clarification regarding the sales and use tax exemption applicable to purchases made by state and federally-chartered credit unions. Purchases of tangible personal property and services by federally-organized…

Tennessee Bills Causes Delays in SST Conformity for Two Years

Bills were introduced in legislation which, if passed, would delay Tennessee’s compliance with the Streamlined Sales and Use Tax Agreement until July 1, 2009. Initially, Tennessee, an associate member of SST Governing Board, was scheduled to come into effect on…

Tennessee Provides Reminders for Sales Tax Holidays

As a reminder, Tennessee will provide taxpayers with two sales tax holidays which will allow them to make tax-free purchases: April 27-29, 2007 and August 3-5, 2007. During both periods, the state will exempt items such as qualified clothing, school…

Tennessee Exempts Prosthetic Devices

Tennessee has allowed a small metal device called a vena cava filter that is designed to protect against pulmonary embolisms to be exempt from their sales and use tax as a prosthetic device. The State defines a prosthetic as a…

Bellsouth Denied Tax Refund Request on Voice Mail Services

Following a recent audit, the Tennessee Department of Revenue determined that Bellsouth Telecommunication’s most basic voice mail service was not taxable, but that other voice mail services (which offered customers extra features and functionality) were, in fact, taxable. The Company’s…

Tennessee Enacts Annual Sales Tax Holiday For Selected Items

Beginning on the first Friday of each August and ending at the subsequent Sunday, the State of Tennessee will initiate an annual sales tax holiday. As part of this holiday, clothing and school supplies valued at less than one-hundred dollars…

Tennessee Implementation of Streamlined Sales Tax Laws Delayed.

On June 6, 2005, the Tennessee Governor approved House Bill 2088, therein delaying the implementation date of streamlined sales tax laws from July 1, 2005 until July 1, 2007. Also included in the bill is the requirement that state delegates…

Tennessee Electronic Payment Threshold Reduced.

As of May 12, 2005 the Commissioner of Revenue lowered the threshold for mandatory electronic filing of sales tax returns from $10,000 to $5,000 after amending the Tenn. Code Ann. § 67-1-703(b). Previously, taxpayers with a liability of less than…