Tennessee's statewide sales tax is 9.55%, but your actual rate depends on which county and city you live or shop in
Tennessee has no state income tax, which means the state relies heavily on sales tax revenue. The state sales tax rate is 9.55%, but that is only part of what you pay at checkout. Counties and cities add their own local sales taxes on top of the state rate, so your total can range from 9.55% to as high as 10.05% depending on where you are.
The reason your receipt shows a different rate than your neighbor's is that Tennessee allows counties to set their own local rate, and some cities add an additional layer on top of that. A purchase in Nashville will have a different tax than the same purchase in Memphis or Knoxville, even though all three are in Tennessee.
Key Takeaways
- Tennessee's state sales tax is 9.55%, but counties and cities add local taxes that raise the total to between 9.55% and 10.05%.
- Your actual tax rate depends on the specific county and city where you make the purchase, not where you live.
- Most counties in Tennessee add between 1.5% and 2.75% in local sales tax on top of the state rate.
- You can find your exact local rate by entering your address into the Tennessee Department of Revenue's tax rate lookup tool or by asking a retailer in your area.
How the state and local rates stack together
Tennessee's sales tax is built in layers. The state collects 9.55% on most purchases. On top of that, your county adds a local rate, which varies widely. Then some cities add an additional city tax. All three rates combine to create your final tax at checkout.
For example, Davidson County (Nashville) has a county rate of 2.25%, and Nashville city adds another 0.75%, bringing the total to 12.55%. In contrast, Shelby County (Memphis) has a county rate of 2.25% and Memphis city adds 1.5%, for a total of 13.3%. Meanwhile, Knox County (Knoxville) has a county rate of 2.25% and Knoxville city adds 1.5%, for a total of 13.3%. These are among the highest rates in the state.
Some counties have lower local rates. For instance, certain rural counties may have only a 1.5% county rate with no additional city tax, bringing the total to 11.05%. The variation exists because counties and cities set their own rates to fund local services.
Where to find your exact local sales tax rate
The Tennessee Department of Revenue maintains an online tax rate lookup tool on its website. You enter your street address, city, and zip code, and the tool returns your exact combined sales tax rate. This is the most reliable way to know what you will pay, because it accounts for all three layers: state, county, and city.
If you do not have internet access or prefer to call, you can contact the Tennessee Department of Revenue directly at 615-253-0600. They can tell you the rate for any address in the state. Local tax assessor offices in your county can also provide this information.
Retailers in your area can also tell you the rate, since they calculate it every day. If you shop at the same store regularly, ask a cashier or manager what the local rate is, and they can give you the answer on the spot.
What items are taxed and what are not
Most items you buy in Tennessee are subject to sales tax, including clothing, electronics, and household goods. However, Tennessee exempts certain items from sales tax. Groceries and prescription medications are not taxed. Over-the-counter medications are taxed, but prescription drugs are not.
Services are generally not taxed in Tennessee, though there are exceptions. A haircut or car repair is not subject to sales tax, but some services bundled with products may be. For example, if you buy a product and pay for installation as part of the same transaction, the installation portion may be taxed depending on the item and the retailer's structure.
Restaurant meals and prepared foods are taxed at the full rate. If you buy a sandwich from a deli counter, it is taxed. If you buy ingredients to make a sandwich at home, they are not taxed.
How sales tax rates have changed over time
Tennessee's state sales tax rate has remained at 9.55% since 2002. Before that, it was 9.45%. The state has not raised the state rate in over two decades, though individual counties and cities have adjusted their local rates.
Local rates change more frequently than the state rate, but changes are not common. When a county or city does raise its rate, it is usually to fund a specific project or service, and the change is announced in advance. You can check with your county assessor's office if you want to know whether a rate change is planned in your area.
Sales tax on online and mail orders
Tennessee requires online retailers to collect and remit sales tax on orders shipped to Tennessee addresses. This applies whether you order from a Tennessee company or an out-of-state company. The tax rate applied is based on the delivery address, not where the company is located.
If you order something online and it is shipped to your home in Nashville, Nashville's combined rate applies. If it is shipped to a different city or county, that location's rate applies instead. Most major online retailers now calculate this automatically at checkout.
Mail orders and phone orders follow the same rule. The tax is based on where the item is being delivered, and the retailer is responsible for collecting it.
Frequently Asked Questions
Does Tennessee have sales tax on groceries?
No. Groceries and food items intended for home preparation are not subject to sales tax in Tennessee. This includes produce, meat, dairy, bread, and canned goods. However, prepared foods like restaurant meals, deli items, and hot foods are taxed at the full rate.
What is the sales tax rate in Memphis, Nashville, and Knoxville?
Memphis (Shelby County) is 13.3%. Nashville (Davidson County) is 12.55%. Knoxville (Knox County) is 13.3%. These are the combined state, county, and city rates. Rates can vary within each county depending on the specific city or unincorporated area, so use the Department of Revenue's lookup tool for your exact address.
Do I pay sales tax on prescription medications?
No. Prescription medications are exempt from sales tax in Tennessee. Over-the-counter medications like pain relievers and cold medicine are taxed at the full rate. Your pharmacist can tell you which items are exempt when you purchase them.
Can I get a refund of sales tax if I return an item?
Yes. When you return an item for a refund, the sales tax you paid is refunded along with the purchase price. If you exchange an item for another of equal or lesser value, the tax difference is refunded. If you exchange for a higher-priced item, you pay tax on the difference.
Do I need to pay sales tax on items I buy outside Tennessee and bring home?
No. Sales tax is collected at the point of sale in the state where you purchase the item. If you buy something in another state and bring it to Tennessee, you do not owe Tennessee sales tax on it. However, some states require you to report out-of-state purchases on your tax return; Tennessee does not have this requirement.