Tennessee has a statewide sales tax of 9.55 percent
Tennessee charges a 9.55% sales tax on most goods and some services. This rate combines the state sales tax (9.55%) with no additional local option tax at the state level, though individual counties and cities may add their own local taxes on top. The total you pay depends on where you shop — a purchase in one county may cost more in tax than the same purchase across the county line.
The state tax applies to tangible personal property — things you can touch and take with you. Groceries, clothing, electronics, and household items are all taxed. Some services are taxed too, including repairs, alterations, and certain professional services, though the rules vary by type of service.
Tennessee has no state income tax, which is why the sales tax rate is higher than in many other states. The state relies on sales tax revenue instead of taxing wages or investment income.
Key Takeaways
- Tennessee's statewide sales tax is 9.55%, but your actual tax rate depends on local taxes added by your county or city.
- Sales tax applies to most goods and some services, but groceries for home consumption are exempt.
- Different counties and cities add different local taxes, so the same item costs different amounts in tax across Tennessee.
- Tennessee has no state income tax, which is why it relies on sales tax as a major source of state revenue.
How local taxes change your total rate
The 9.55% state rate is a floor, not a ceiling. Counties and cities can add their own local sales taxes on top of it. Some areas add 1.5%, others add 2.75% or more. A few counties have lower local rates. The result is that your total sales tax can range from about 9.55% to over 11% depending on exactly where you are.
You pay the tax rate of the place where you make the purchase, not where you live. If you live in one county and shop in another, you pay that county's combined rate. Online purchases are more complicated — the seller's location, your location, and the type of item all matter, and the rules have changed in recent years.
To find the exact rate where you shop, search online for your city and county name plus "sales tax rate," or ask the store directly. Most retailers know their local rate.
What is and is not taxed in Tennessee
Groceries for home consumption are not taxed in Tennessee. This means unprepared food you buy at a supermarket — produce, meat, dairy, bread, canned goods — is tax-free. Prepared food is taxed: restaurant meals, deli items, hot food from a grocery store, and food from vending machines all have sales tax.
Prescription medications are not taxed. Over-the-counter medicines and vitamins are taxed. Clothing and shoes are taxed. Gasoline is taxed. Utilities (electricity, water, gas) are taxed. Repairs to tangible property — fixing a car, repairing a phone, tailoring clothes — are taxed.
Some services are exempt: medical services, legal services, and certain professional services are generally not taxed. But labor that goes into repairing or altering a physical item is taxed. The line between "service" and "taxable labor on goods" is sometimes unclear, and disputes happen.
Sales tax on online and out-of-state purchases
Online retailers must collect Tennessee sales tax on orders shipped to Tennessee addresses if the retailer has a physical presence in Tennessee or meets certain sales thresholds. Large national retailers like Amazon collect Tennessee tax on most items. Smaller sellers may not, depending on their setup and sales volume.
If a seller does not collect tax at checkout, you may owe use tax — a tax on items you buy outside Tennessee or online and bring into the state. Use tax is the same rate as sales tax. In practice, most individuals do not report use tax on personal purchases, though technically they owe it. Businesses are more likely to track and report use tax.
The rules for what gets taxed online have shifted several times in recent years as federal law and state policy have changed. If you are unsure whether tax was collected on a specific purchase, check your receipt or contact the seller.
Who collects and where the money goes
Retailers collect sales tax at the point of sale and send it to the state. The state then distributes the revenue: a portion stays with the state government, and a portion goes to the county and city where the sale happened. This is why local governments have an interest in sales tax rates — the revenue funds local services.
Sellers are responsible for collecting the correct rate and remitting it on time. If a store charges you the wrong rate, the store owes the difference to the state, not to you. You do not get a refund if you were overcharged.
Frequently Asked Questions
Do I pay sales tax on groceries in Tennessee?
No, groceries for home consumption are not taxed. This includes produce, meat, dairy, bread, and canned goods from a supermarket. Prepared food — restaurant meals, hot deli items, and food from vending machines — is taxed.
What is the sales tax rate in my city?
Tennessee's state rate is 9.55%, but your total rate depends on local taxes added by your county and city. Search online for your city name plus "sales tax rate," or call a local store and ask. Rates vary and can change, so checking directly is fastest.
Do I owe tax on items I buy online from out of state?
If the seller collects Tennessee tax at checkout, you owe nothing more. If they do not, you technically owe use tax — the same rate as sales tax — but most individuals do not report it on personal purchases. Businesses are expected to track and report use tax.
Why does Tennessee have such a high sales tax?
Tennessee has no state income tax, so it relies on sales tax as a major source of revenue. The high sales tax rate is the trade-off for not taxing wages or investment income.
Can I get a sales tax refund if I was charged the wrong rate?
No. If a store charges you an incorrect rate, the store owes the difference to the state, not to you. You do not receive a refund. If you believe you were significantly overcharged, you can contact the store's management, but there is no automatic refund process.