Tennessee's statewide sales tax is 9.55 percent
Tennessee has a combined state and local sales tax of 9.55 percent. This is made up of a 4 percent state tax plus local taxes that vary by county and city. The local portion ranges from 1.5 percent to 2.75 percent depending on where you live, which is why the total you pay at checkout changes based on your location within the state.
When you buy something in Tennessee, the merchant collects the full combined rate from you at the point of sale. You do not pay state tax and local tax separately — the register shows one total. The merchant then sends the collected tax to the state, which distributes the local portion to the appropriate county and city.
Tennessee is one of the few states with no income tax, which is why the state relies more heavily on sales tax revenue than many other states do. This means the sales tax rate is higher than it would be in a state that also collects income tax.
Key Takeaways
- Tennessee's combined sales tax rate is 9.55 percent statewide, but the exact rate you pay depends on your county and city.
- The state portion is 4 percent; local taxes add between 1.5 and 2.75 percent on top of that.
- Sales tax applies to most goods, but groceries, prescription medications, and some medical equipment are exempt.
- You pay sales tax at the register when you buy something; you do not file a separate form or pay it later.
How local taxes change the rate you pay
The 9.55 percent figure is an average. Your actual rate depends on which county and city you are in. For example, if you live in Nashville (Davidson County), you pay a different rate than someone in Memphis (Shelby County) or Knoxville (Knox County). Some counties add 1.5 percent in local tax; others add 2.75 percent.
To find your exact rate, you can look up your county on the Tennessee Department of Revenue website or ask a local merchant. The rate does not change based on what you buy — it is the same whether you are purchasing clothing, electronics, or household items (with the exceptions noted below).
If you shop online and the seller ships to Tennessee, you pay the sales tax rate for the address where the item is being delivered. If you buy something in one county and have it shipped to another, the tax rate of the delivery address applies.
What is and is not taxed in Tennessee
Most tangible goods are subject to sales tax in Tennessee. This includes clothing, furniture, electronics, appliances, and tools. Services are generally not taxed — for example, you do not pay sales tax on haircuts, car repairs, or plumbing work, though parts and materials used in those services may be taxed.
Several categories are exempt from sales tax. Groceries and food for home consumption are not taxed. Prescription medications are exempt. Medical equipment prescribed by a doctor — such as wheelchairs, hearing aids, and diabetic supplies — is also exempt. Certain agricultural items and equipment used in farming are exempt as well.
Prepared food and restaurant meals are taxed. If you buy a sandwich from a deli counter to eat there or take home, you pay sales tax. If you buy ingredients to cook at home, you do not. The distinction is whether the food is ready to eat.
Sales tax on online and out-of-state purchases
If you order something online from a retailer outside Tennessee and have it shipped to a Tennessee address, you owe Tennessee sales tax on that purchase. Large online retailers now collect and send this tax automatically. Smaller sellers may not, and in those cases you are technically responsible for reporting and paying the tax yourself, though enforcement is limited.
If you travel to another state and buy something there, you pay that state's sales tax at the register. You do not owe Tennessee sales tax on items you bought out of state. However, if you order something from out of state and have it shipped to Tennessee, Tennessee tax applies.
Who collects and where the money goes
The merchant — the store, restaurant, or online seller — collects sales tax from you and holds it temporarily. They then send the collected tax to the Tennessee Department of Revenue, usually monthly. The state keeps the 4 percent state portion and distributes the local portion to the county and city where the sale occurred.
Local governments use their share of sales tax revenue to fund schools, roads, police, fire departments, and other services. Because Tennessee has no income tax, sales tax is a major source of funding for both state and local government operations.
How to verify the tax on your receipt
When you receive a receipt, the sales tax should be listed as a separate line item. You can verify it by multiplying the subtotal (before tax) by the tax rate for your location. For example, if you buy $100 worth of taxable items in a county with a 9.55 percent rate, the tax should be $9.55, making your total $109.55.
If the tax amount seems wrong, check that the merchant used the correct rate for your location. If you believe you were charged the wrong rate, you can contact the merchant or the Tennessee Department of Revenue. Keep your receipt in case you need to dispute a charge.
Frequently Asked Questions
Do I pay sales tax on groceries in Tennessee?
No. Groceries and food for home consumption are exempt from Tennessee sales tax. This includes items like bread, milk, vegetables, and canned goods. Prepared food, restaurant meals, and items from a deli counter are taxed.
What is the sales tax rate in my city?
Your rate depends on your county and city. You can find your exact rate on the Tennessee Department of Revenue website by entering your zip code or county name. You can also ask a local merchant or call your city or county tax assessor's office.
Do I have to pay sales tax on prescription medications?
No. Prescription medications are exempt from Tennessee sales tax. Over-the-counter medications and vitamins are taxed, but prescription drugs filled at a pharmacy are not.
If I buy something online from out of state, do I pay Tennessee sales tax?
Yes, if it is shipped to a Tennessee address. Large retailers collect this tax automatically. Smaller sellers may not, and you may be responsible for reporting it yourself, though this is rarely enforced for individual purchases.
Is sales tax the same everywhere in Tennessee?
No. The state portion is always 4 percent, but local taxes range from 1.5 to 2.75 percent depending on your county and city. Your total rate is the combination of both, so it varies by location.