Tennessee's statewide sales tax rate 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 differs across the state.

The 9.55 percent figure is the statewide average. Your actual rate depends on your location. If you buy something in Nashville, you pay a different rate than someone buying the same item in Memphis or Knoxville. The tax applies to most goods, though some items are taxed differently or not at all.

Key Takeaways

  • Tennessee's state sales tax is 4 percent, but your total rate also includes local taxes that range from 1.5 to 2.75 percent.
  • The combined rate varies by county and city, so you pay different amounts depending on where you make your purchase.
  • Groceries, prescription medications, and medical equipment are generally not subject to sales tax in Tennessee.
  • Online purchases are subject to the same sales tax as in-store purchases if the seller has a physical presence in Tennessee.

How local taxes add to the state rate

Tennessee's 4 percent state sales tax is the foundation, but counties and cities add their own local taxes on top. These local rates are set by individual municipalities and fund schools, roads, and other local services. The lowest combined rate in the state is around 8.5 percent, and the highest reaches 9.75 percent.

Davidson County (Nashville) charges 9.25 percent total. Shelby County (Memphis) charges 9.25 percent. Knox County (Knoxville) charges 9.45 percent. These are the major urban areas, but smaller towns and rural counties have their own rates. If you move between counties or shop in different cities, the tax rate you see will change.

What items are not taxed in Tennessee

Groceries are not subject to sales tax in Tennessee. This includes food you buy at a supermarket or grocery store — bread, milk, vegetables, meat, and other items meant for home consumption. Restaurant meals and prepared foods are taxed, but raw groceries are not.

Prescription medications are also exempt from sales tax. Over-the-counter medicines like aspirin or cold medicine are taxed, but prescription drugs filled by a pharmacist are not. Medical equipment prescribed by a doctor — such as wheelchairs, crutches, or diabetic supplies — is generally not taxed either. Clothing is taxed in Tennessee, unlike in some other states.

Sales tax on online and out-of-state purchases

Online purchases are subject to Tennessee sales tax if the seller has a physical presence in the state — a warehouse, office, or store location. Large retailers like Amazon collect Tennessee sales tax on orders shipped to Tennessee addresses. Smaller online sellers without a Tennessee location may not collect the tax at checkout, but you are technically responsible for paying it yourself when you file taxes.

In practice, most people do not report and pay this tax individually. The state focuses enforcement on large sellers. If you buy from a small out-of-state seller with no Tennessee presence, the tax is usually not collected. The rule changed in 2018 when the U.S. Supreme Court ruled that states can require online sellers to collect sales tax regardless of where they are located.

Finding your exact local sales tax rate

Your exact sales tax rate depends on your street address, not just your city or county. Some areas within a county have different rates because of special tax districts for schools or transit. The Tennessee Department of Revenue maintains a sales tax rate lookup tool on its website where you can enter your address and see your precise rate.

When you move to a new address in Tennessee, your sales tax rate may change even if you stay in the same city. This is especially true if you cross into a different school district or special taxing district. Checking your rate before making a large purchase can help you budget accurately.

How sales tax appears on your receipt

Retailers in Tennessee show the sales tax separately on your receipt. The subtotal appears first, then the tax is calculated and added. You see the breakdown so you know how much of your total payment is tax. Some receipts show the state portion and local portion separately, though most show only the combined amount.

The tax is calculated on the subtotal before any discounts or coupons are applied. If you have a coupon that reduces the price, the tax is calculated on the lower amount. This is why two people buying the same item at the same store might pay slightly different tax amounts if one used a discount.

Frequently Asked Questions

Is Tennessee sales tax higher or lower than neighboring states?

Tennessee's combined rate of 9.55 percent is higher than Kentucky (6 percent) and lower than Arkansas (9.63 percent). Georgia's rate is 7.36 percent. Tennessee ranks in the middle-to-high range nationally, though rates vary widely by location within each state.

Do I pay sales tax on used items or secondhand purchases?

Sales tax applies to used goods sold by businesses, including used cars, used furniture, and items sold in thrift stores. Private sales between individuals are generally not taxed. If you sell your car to a friend, no sales tax applies, but if you sell it to a used car dealer who resells it, tax applies to that transaction.

What about sales tax on services in Tennessee?

Most services are not subject to sales tax in Tennessee. Haircuts, car repairs, plumbing, and legal services are not taxed. However, some services bundled with goods — like installation or delivery — may be taxed depending on how the business structures the charge.

Can I get a sales tax refund if I overpaid?

No. Sales tax is final once you pay it at checkout. If you believe you were charged incorrectly, contact the retailer directly. The retailer is responsible for collecting and remitting the correct amount to the state.