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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 Bill Clarifies Definition of “”Telecommunications Service.””

In an amendment to Senate Bill 2310, the Tennessee General Assembly has provided a new definition of “telecommunications service.” Effective July 1, 2007, “telecommunication service” is defined as “electronic transmission, conveyance, or routing of voice, data, audio, video, or any…

Tennessee Court of Appeals Rules on Materials Incorporated into Churches

The Tennessee Court of Appeals has ruled that a taxpayer’s purchase of raw materials that were fabricated into steel products and later installed into churches were not entitled to a sales tax exemption. The court found that the materials were…

Tennessee Rules That Taxpayer Did Not Qualify as a Manufacturer.

A Tennessee Court of Appeals ruled that a taxpayer who operated a concrete block manufacturing facility and a retail sales office that sold the blocks on the same property, did not qualify as a manufacturer. The court found that the…

Tennessee Issues Revenue Review Citing Discovery and Collection of Delinquent Taxes.

The State of Tennessee has recently issued a Revenue Review indicating it is enhancing its processes in assuring tax compliance and will be increasing its efforts to identify and collect delinquent use tax and business tax. The Revenue Review discusses…

Tennessee Discusses Taxability of Steel Fabrication.

In a letter ruling, the Tennessee Department of Revenue stated that a business that fabricated iron and steel could accept a resale certificate from a dealer planning to resell the material rather than install it. The fabricator would have to…

Tennessee Court Rules That Property Used in College Food Service is Taxable

A company that used a university’s property and utilities to run the campus food service argued that it was exempt because it was an agent of the university. The court found that the university did not hold the required significant…

Tennessee Explains Expanded Call Center Exemption

The Tennessee Department of Revenue clarified the implications of a new, expanded exemption. The new exemption provides that international telecommunication services sold to a business for use in a call center are now exempt. New exemption certificates will be mailed…

Tennessee states new effective date.

Enacted Tennessee law has established an effective date on most conformity provisions of July 1, 2005 (previously July 1, 2004) or the first day of the second quarter following the effective date of the agreement. The new law, S.B. 3454…

Tennessee food sales subject to varying rates.

Retail sales of prepared food are subject to the full Tennessee state sales and use tax rate of 7% plus the applicable local option rate, unlike unprepared food which is subject to a reduced state rate of 6% plus the…

Tennessee provides new refund procedures for Internet access tax refunds.

Consumers must submit written requests to their Internet service provider (ISP) no later than July 17, 2004 and claims will only be valid for sales tax paid on Internet access which they paid, dating back to December 1, 2000. Internet…

The Tennessee Supreme Court supports the Appellate Court’s decision that online information services do not constitute taxable telecommunications services.

In this case, the true object test was used to determine whether the item being sold in the transaction was information or telecommunications services. The court held that the object of the sale was information because the vendor sold Internet…

Catalysts not considered exempt for manufacturing in Tennessee.

The Tennessee use tax exemption for industrial machinery does not cover the catalysts used by a chemical manufacturer in its manufacturing process. In a recent case, a manufacturer paid use tax from 1995 – 1997 and sought a refund for…

Effective Immediately — Tennessee Internet access no longer taxable.

In Tennessee, ISP’s should no longer collect sales tax on sales of Internet access. If sales tax has been collected, refund requests may be submitted as long as (1) claims are filed within 3 years of December 31 of the…

Tennessee may require electronic filing.

Taxpayers in Tennessee who have $10,000 or more in sales and use tax payments must make electronic payments and starting for tax periods after 2003 they must electronically file corresponding tax returns. A penalty of $500 may be incurred for…

Tennessee guidelines for returns.

Special annual return filing instructions for reporting sales made before the July 15, 2002 state sales and use tax rate increase have been issued by the Department of Revenue. Specific instructions are included on the 2002 annual return forms to…

Tennessee network service not considered taxable telecommunications.

Computer network services using computer systems to display information and allow users to interact to make transactions are not considered taxable for sales and use tax purposes, even though there are some telecom transmissions occurring during the process. The court…

Tennessee church addition construction addressed.

In Tennessee, a church made additions to an already existing sanctuary and the Department of Revenue deemed it to be church construction for sales and use tax criteria. This meant the contractor was responsible for paying all sales and use…

Tennessee has stated that leases are subject to the sales and use tax 1% rate increase from CH. 856 (S.B. 3110), Laws 2002.

All lease payments made after July 15, 2002 are effected by this law change regardless of when the lease originally started. In addition, changes contained in TCA Sec. 67–6-702(d) will effect leases of tangible personal property with single items that…

Tennessee rate change.

Tennessee has recently been in some serious budget trouble. Consequently, the Tennessee legislature proposed a special session meeting. As a result, effective July 15, 2002, the state Sales and Use tax rate is increasing from 6% to 7%. The new…

Incentive program in Tennessee.

Tennessee allowed an exemption for a manufacturing incentive program through which the manufacturer allows customers to earn points to purchase or obtain merchandise. The merchandise shipped to out-of-state customers was not taxable because title to and possession of the tangible…

Tennessee broadcasting exemption.

The industrial machinery exemption includes certain broadcasting equipment if used by broadcasting companies to process and fabricate tangible personal property such as broadcast signals. This machinery includes but is not limited to: receivers, controllers, field recorders, decoders, transmitters, towers, and…