Tennessee's sales tax rate and what it covers

Tennessee has a state sales tax of 4.55 percent, which applies to most goods you buy in stores. On top of that, your county or city adds a local sales tax that ranges from 1.75 percent to 2.85 percent depending on where you live. Your total sales tax bill is the state rate plus your local rate — so if you live in Nashville (Davidson County), you pay 9.55 percent total; in Memphis (Shelby County), you pay 9.55 percent; in Knoxville (Knox County), you pay 9.26 percent. The rate you see on your receipt is the combined state and local amount.

Sales tax in Tennessee applies to tangible goods — things you can touch and take home. That includes clothing, groceries, furniture, electronics, and gasoline. It does not apply to services like haircuts, car repairs, or medical visits. Some items have special rules: groceries for home consumption are taxed at a reduced rate of 4 percent (state only, no local tax added), while prepared food and restaurant meals are taxed at the full combined rate.

Key Takeaways

  • Tennessee's state sales tax is 4.55 percent, and your county or city adds between 1.75 and 2.85 percent on top of that.
  • Sales tax applies to goods you buy in stores but not to services like haircuts or medical care.
  • Groceries for home use are taxed at 4 percent (state rate only), while restaurant meals and prepared food are taxed at the full combined rate.
  • You pay sales tax at the point of sale — the cashier calculates it and adds it to your bill.
  • Some items like prescription medications and certain medical equipment are exempt from sales tax entirely.

Which items are taxed and which are not

Most physical items you buy are subject to sales tax in Tennessee. Clothing, shoes, household goods, toys, books, and electronics all get taxed at your local combined rate. Gasoline at the pump is taxed, as is vehicle maintenance and repair work — though parts and labor are sometimes taxed differently depending on the situation.

Several categories are either fully exempt or taxed at a lower rate. Prescription medications are not taxed. Medical equipment like wheelchairs, crutches, and oxygen equipment are exempt. Groceries you buy to prepare at home — bread, milk, vegetables, meat, canned goods — are taxed at 4 percent (the state rate only, with no local tax added). Prepared food and restaurant meals, by contrast, are taxed at your full combined rate because they are considered prepared food, not groceries.

Services are generally not taxed. A haircut, dental work, car repair, plumbing, electrical work, and medical visits do not have sales tax added. However, if you buy a product as part of that service — like hair dye at a salon or parts replaced during a repair — the product itself may be taxed.

How local rates vary across Tennessee counties

Tennessee's 4.55 percent state rate is the same everywhere in the state, but each county and city sets its own local rate on top of that. This means your total sales tax depends on exactly where you make the purchase. A purchase in one county might be taxed at 9.26 percent, while the same purchase across the county line could be 9.55 percent.

The local rate ranges from 1.75 percent (the lowest) to 2.85 percent (the highest). Some counties use the full range available to them, while others use a lower rate. If you live near a county border and make large purchases, the difference can add up — a $1,000 purchase taxed at 9.26 percent costs $92.60 in tax, while the same purchase at 9.55 percent costs $95.50. Your city or county assessor's office can tell you the exact rate for your location, or you can check the Tennessee Department of Revenue website.

When you pay sales tax and how it is calculated

You pay sales tax at the moment you buy something — the cashier or checkout system calculates it and adds it to your total bill. The tax is based on the price of the item before any discounts are applied. If an item is on sale, you pay tax on the sale price, not the original price. If you use a coupon, the tax is calculated on the price after the coupon is deducted.

The calculation is straightforward: the store multiplies the taxable price by your local combined sales tax rate. If you buy a $50 item in Nashville (9.55 percent combined rate), the tax is $50 × 0.0955 = $4.78, so your total is $54.78. Online purchases have different rules depending on whether the seller has a physical location in Tennessee and other factors — some online purchases are taxed, some are not, and the rules change based on state and federal law.

Tax-free shopping days and special exemptions

Tennessee does not have an annual tax-free shopping day like some states do. However, certain items and situations are permanently exempt from sales tax. Prescription medications, medical equipment for people with disabilities, and items used in manufacturing or agriculture may be exempt depending on the specific circumstances and how they are used.

Nonprofit organizations and government agencies may be exempt from paying sales tax on purchases they make for their operations, though they must register for an exemption certificate with the Tennessee Department of Revenue. If you are buying on behalf of a nonprofit or government entity, you will need to provide documentation of that status at the time of purchase.

Frequently Asked Questions

Do I pay sales tax on online purchases from out-of-state sellers?

It depends on whether the seller has a physical presence in Tennessee and meets certain sales thresholds. Many large online retailers now collect Tennessee sales tax on orders shipped to Tennessee addresses. If tax was not collected, you may owe it when you file your state tax return, though most individual purchases are not tracked this way. Check your receipt to see if sales tax was charged.

Why is the sales tax rate different in my county than the next one over?

Each county and city in Tennessee sets its own local sales tax rate within a range set by state law. Counties use these local tax revenues to fund schools, roads, and other services. The state rate is always 4.55 percent, but the local portion varies based on each county's decisions and needs.

Are groceries taxed the same as other items?

No. Groceries you buy to prepare at home are taxed at 4 percent (state rate only), which is lower than the full combined rate. Prepared food, restaurant meals, and food you eat in a store are taxed at your full combined rate because they are considered prepared food, not groceries.

What happens if a store charges me the wrong sales tax amount?

If you notice the tax charged does not match the rate for your county, ask the cashier or store manager to recalculate it. Most errors are honest mistakes in the register settings. If the store refuses to correct it, you can contact the Tennessee Department of Revenue with details about the store and the date of purchase.

Do I have to pay sales tax on used items?

Sales tax applies to used items sold by businesses, including used car dealers and secondhand stores. Private sales between individuals typically do not have sales tax, though the rules vary depending on what is being sold and who is selling it. If you are unsure, ask the seller before you buy.