Tennessee's statewide sales tax is 9.55 percent
Tennessee has a combined state and local sales tax of 9.55 percent. This rate applies to most goods you buy in stores. However, the exact amount you pay depends on which county and city you're in, because Tennessee allows local governments to add their own sales tax on top of the state rate.
The state portion is 4 percent. Cities and counties then add between 1.75 and 2.75 percent on top of that, depending on where you live. A few counties have additional local taxes that push the total higher. This means your actual sales tax rate can range from 8.75 percent to 9.75 percent depending on your location.
You don't need to calculate this yourself — the cashier rings it in automatically. But if you're budgeting or comparing prices across different parts of Tennessee, knowing your local rate helps.
Key Takeaways
- Tennessee's state sales tax is 4 percent, but your total rate includes local taxes added by your city and county.
- The combined rate ranges from 8.75 percent to 9.75 percent depending on where you live in the state.
- Most goods are taxed, but groceries, prescription medications, and medical equipment are not.
- Sales tax is collected at the point of sale and you cannot avoid it by shopping online if the seller has a physical location in Tennessee.
What items are not taxed in Tennessee
Tennessee does not charge sales tax on groceries — food you buy at a grocery store to cook at home. This includes bread, milk, vegetables, meat, and canned goods. However, prepared food, restaurant meals, and food from a deli counter are taxed.
Prescription medications are also exempt from sales tax. You must present a valid prescription to the pharmacist. Over-the-counter medications like pain relievers and cold medicine are taxed as regular goods.
Medical equipment and supplies used to treat a specific condition — such as diabetic test strips, hearing aids, and mobility devices — are not taxed. Cosmetics and general wellness items do not may have access to for this exemption.
How local rates vary across Tennessee counties
Tennessee divides sales tax into state and local portions, and the local portion is where variation happens. Davidson County (Nashville) has a combined rate of 9.55 percent. Shelby County (Memphis) also sits at 9.55 percent. Knox County (Knoxville) is 9.45 percent. These are the largest population centers, but smaller counties may have different rates.
The variation exists because each city and county sets its own local tax rate within state limits. A county might use 2.25 percent local tax while a neighboring county uses 1.75 percent. Some counties have added special district taxes for specific purposes like transit or schools, which can push the rate up another 0.25 percent.
If you live near a county line, you might pay different rates depending on which side of the line you shop. This is why knowing your specific county and city matters if you're tracking expenses or comparing costs.
Sales tax on online purchases
Online retailers that have a physical presence in Tennessee — a warehouse, office, or store location — must charge you Tennessee sales tax on your purchase. This includes major retailers like Amazon, Walmart, and Target. The tax rate applied is based on your delivery address, not where the company is headquartered.
Retailers without a Tennessee location are not required to charge Tennessee sales tax, though this is becoming less common. Many large online sellers now charge sales tax in all states regardless of whether they have a physical location there.
If you buy something online and no sales tax was charged, you are technically supposed to report it on your state tax return as "use tax." In practice, most individuals do not do this, but the obligation exists under Tennessee law.
Sales tax on services in Tennessee
Tennessee does not charge sales tax on most services. If you hire a plumber, electrician, accountant, or lawyer, you pay no sales tax on their labor. Haircuts and salon services are not taxed. Repair services — fixing a car, appliance, or phone — are not taxed.
However, some services are taxed. Telecommunications services (your phone and internet bill) are subject to sales tax. Certain digital services and subscriptions may be taxed depending on how they are classified. If you are unsure whether a specific service is taxed, ask the business directly — they are required to know their own tax obligations.
Who collects and where the money goes
The business selling you the item collects the sales tax and sends it to the Tennessee Department of Revenue. The state keeps the 4 percent state portion and distributes the local portion to the city and county where the sale occurred.
Local governments use their share for schools, roads, public safety, and other services. The state uses its portion for general operations and programs. You do not file anything or claim anything related to sales tax — it is handled entirely between the business and the government.
Frequently Asked Questions
Does Tennessee charge sales tax on clothing?
Yes. Clothing, shoes, and accessories are all subject to Tennessee sales tax at your local rate. There is no clothing exemption in Tennessee, unlike some other states.
What if I buy something in one county and use it in another?
You pay the sales tax rate of the county where you make the purchase, not where you use the item. The tax is based on the point of sale, not the destination.
Are there any other items that are not taxed besides groceries and prescriptions?
Yes. Newspapers and magazines are not taxed. Certain agricultural equipment and seeds used for farming are exempt. Prosthetic devices and mobility aids for people with disabilities are not taxed. The full list is long, so if you think an item might be exempt, ask the retailer or check the Department of Revenue website.
Do I pay sales tax on a used car purchase?
Yes. Used car sales are subject to sales tax in Tennessee. The tax is calculated on the purchase price of the vehicle. This applies whether you buy from a dealer or a private seller.