Tennessee: Sales Tax Handbook
Tennessee Sales Tax Rate
|State Sales Tax||Local Sales Tax Range||Average Local Tax||Average Combined Tax||Max Combined Tax|
|7.00%||1.50% - 2.75%||2.488%||9.488%||9.75%|
2016 Tennessee Sales Tax Handbook
Tennessee Table of Contents
- List of Local Sales Tax Rates
- Sales Tax Calculator
- Sales Tax Exemption Certificates
- Sales Tax Info For Businessowners
- Taxable vs. Non-Taxable Purchases
- Sales Tax on Cars & Vehicles
- More Information
Tennessee's Sales Tax By The Numbers:
Tennessee has a higher-than-average sales tax, including when local sales taxes from Tennessee's 113 local tax jurisdictions are taken into account.
Rankings by Average State + Local Sales Tax:
Ranked 3rd highest by combined state + local sales tax
Ranked 9th highest by per capita revenue from state + local sales taxes ($1,325 per capita)
Rankings by State Sales Tax Only:
Ranked 2nd highest by state sales tax rate
Ranked 10th highest by per capita revenue from the statewide sales tax ($1,024 per capita)
Printable PDF Tennessee Sales Tax Datasheet
Tennessee has a statewide sales tax rate of 7.00%, which has been in place since 1947.
Municipal governments in Tennessee are also allowed to collect a local-option sales tax that ranges from 1.50% to 2.75% across the state, with an average local tax of 2.488% (for a total of 9.488% when combined with the state sales tax). The maximum local tax rate allowed by Tennessee law is 2.75%. You can lookup Tennessee city and county sales tax rates here.
This page provides an overview of the sales tax rates and laws in Tennessee. If you are a business owner and need to learn more about things like getting a sales tax permit, filing a sales tax return, or making tax-exempt purchases for resale see the Tennessee Sales Tax Handbook's Table of Contents above.
What is exempt from sales taxes in Tennessee?
Many states have special sales tax rates that apply to the purchase of certain types of goods, or fully exempt them from the sales tax altogether. Here's how Tennessee taxes five types of commonly-exempted goods:
For more details on what types of goods are specifically exempt from the Tennessee sales tax see Tennessee sales tax exemptions. To learn more about what types of transactions are subject to the sales tax to begin with, see what purchases are taxable in Tennessee? Taxation of vehicle purchases in particular are discussed in the page about Tennessee's sales tax on cars.
Are services subject to sales tax in Tennessee?
"Goods" refers to the sale of tangible personal property, which are generally taxable. "Services" refers to the sale of labor or a non-tangible benefit. In Tennessee, specified services are taxable.
About the Tennessee Sales Tax
In Tennessee, the sales tax rates are fairly simple. The state utilizes a flat state tax rate. However, in addition to the flat state tax rate, there are slightly complicated rules regarding county taxes or local city taxes. The Tennessee state tax rate was raised in 2002, and has not been altered since.
Is the Tennessee Sales Tax Destination-Based or Origin-Based?
Tennessee is a origin-based sales tax state, which means sales tax rates are determined by the location of the vendor, not by the location of the buyer. The origin-based method of determining sales tax is less complicated for vendors than destination-based sales tax, because all in-state buyers are charged the same sales tax rate regardless of their location.
Is Tennessee a Streamlined Sales Tax State?
Tennessee is not a member of the Streamlined Sales and Use Tax Agreement. The SSUTA is an agreement adopted by about half of states that ensures that their sales tax laws are simplified to lower the costs associated with compliance.
Contact the Tennessee Department of Revenue
The Tennessee Sales Tax is administered by the Tennessee Department of Revenue. You can learn more by visiting the sales tax information website at www.tn.gov.
Phone numbers for the Sales Tax division of the Department of Revenue are as follows:
- Local Phone: (615) 253-0600
- Toll-Free Phone: (800) 372-8389
Learn More: Our Book Recommendations
If you would like to learn more about how to manage your Tennessee sales taxes, we recommend the following books:
Simplify Tennessee sales tax compliance! We provide sales tax rate databases for businesses who manage their own sales taxes, and can also connect you with firms that can completely automate the sales tax calculation and filing process. Click here to get more information.
Tennessee Sales Tax Rates by Zip Code:
Need an updated list of Tennessee sales tax rates for your business? Download our Tennessee sales tax database!