Tennessee charges a statewide sales tax of 7 percent on most goods and some services

Tennessee's base sales tax rate is 7 percent. This is the tax the state itself collects on purchases. However, most counties and cities add their own local sales tax on top of the state rate, so your actual tax at checkout ranges from 7 percent to 9.55 percent depending on where you shop. The total you pay is always the combination of state tax plus any local taxes in that specific location.

Sales tax in Tennessee applies to tangible goods — things you can touch and take home. It also applies to some services, though the list of taxable services is narrower than the list of taxed goods. Food you buy at a grocery store is not taxed, but prepared food from a restaurant is. Clothing is not taxed, but most other retail purchases are.

Key Takeaways

  • Tennessee's state sales tax is 7 percent, but your total tax rate depends on your county and city, ranging from 7 to 9.55 percent.
  • Groceries and unprepared food are not taxed; restaurant meals and prepared foods are taxed at the full rate.
  • Clothing and shoes are not taxed in Tennessee, a significant exemption for many households.
  • Services like haircuts, repairs, and professional fees are generally not taxed, though some specific services are.
  • The tax is collected by the merchant at the point of sale and sent to the state and local tax authorities.

What is and is not taxed in Tennessee

Groceries and unprepared food are exempt from sales tax. This means milk, bread, eggs, vegetables, and meat you buy at a supermarket do not have tax added. The rule is simple: if you are buying raw ingredients to cook at home, there is no tax. Once food is prepared — whether at a restaurant, deli counter, or bakery — it becomes taxable.

Clothing and shoes are not taxed in Tennessee. This applies to everyday clothing, work uniforms, and athletic wear. The exemption covers most apparel you would wear, though some specialty items like costumes or protective gear may fall outside the exemption depending on how they are classified.

Most services are not taxed. Haircuts, car repairs, plumbing, electrical work, and professional services like accounting or legal advice do not have sales tax added. However, some specific services are taxed: hotel rooms, rental cars, and certain amusement activities are subject to tax.

Prescription medications are not taxed, but over-the-counter medicines and vitamins are. Medical equipment like wheelchairs or hearing aids is generally not taxed when prescribed by a doctor.

How local sales tax adds to the state rate

Tennessee allows counties and cities to add their own sales tax on top of the 7 percent state rate. Each county sets its own rate, and some cities within those counties add an additional layer. This is why the total rate varies so widely across the state.

For example, Davidson County (Nashville) has a combined rate of 9.55 percent — the highest in the state. Shelby County (Memphis) is 9.25 percent. Some rural counties have rates closer to 7.5 or 8 percent. The only way to know your exact rate is to look at your receipt or check the tax rate for your specific city and county on the Tennessee Department of Revenue website.

Local tax revenue goes to the county or city government, not to the state. This is why rates differ so much — each locality decides how much additional tax it needs to fund local services.

Who collects the tax and where it goes

The merchant — the store, restaurant, or service provider — collects sales tax from you at the point of sale. They are responsible for calculating the correct rate based on your location and the type of item you are buying. The merchant then sends the collected tax to the Tennessee Department of Revenue and to the local tax authority.

The state portion (7 percent) goes into the state general fund and is used for state services. The local portion goes to the county or city government. Merchants file tax returns monthly or quarterly, depending on their sales volume, and remit the tax they have collected.

Special situations and exemptions

Resale certificates allow businesses to buy goods without paying sales tax if they plan to resell those goods. A retailer buying inventory from a wholesaler does not pay tax on that purchase; the tax is collected later when the customer buys the finished product. This prevents tax from being charged multiple times on the same item.

Nonprofit organizations may be exempt from sales tax on certain purchases, though the rules are specific and require documentation. A nonprofit cannot simply claim an exemption — it must register with the state and meet particular criteria.

Out-of-state purchases and online orders are subject to the same sales tax rules as in-person purchases in Tennessee. If you order something online from a company that has a physical presence in Tennessee, or from a large national retailer, sales tax is typically added based on your delivery address in Tennessee.

How to find your local sales tax rate

Your receipt shows the exact tax rate charged on that purchase. The tax amount and rate are printed at the bottom. If you want to know the rate before you shop, the Tennessee Department of Revenue website has a lookup tool where you can enter your city and county to see the combined rate.

You can also call your county assessor's office or city tax office directly. They can tell you the exact rate for your location and answer questions about whether a specific item is taxed.

Frequently Asked Questions

Is clothing taxed in Tennessee?

No. Clothing and shoes are exempt from sales tax in Tennessee. This includes everyday apparel, work uniforms, and athletic wear. The exemption applies whether you buy in a store or online, as long as the item is delivered to a Tennessee address.

Why is my sales tax different from my neighbor's?

Tennessee allows counties and cities to set their own local sales tax rates on top of the 7 percent state rate. If you and your neighbor live in different cities or counties, or even in different parts of the same city, your combined rate may differ. Check your receipt or the Department of Revenue website to see your specific rate.

Do I pay sales tax on groceries?

Unprepared groceries — raw ingredients like produce, meat, dairy, and bread — are not taxed. Prepared foods from a deli, bakery, or restaurant are taxed at the full rate. The line is whether the food is ready to eat or requires cooking.

Is sales tax charged on online orders shipped to Tennessee?

Yes, if the seller has a physical presence in Tennessee or is a large national retailer, sales tax is charged based on your delivery address. The tax rate applied is the combined state and local rate for your location.

What services are taxed in Tennessee?

Most services are not taxed, including haircuts, repairs, and professional fees. However, hotel rooms, rental cars, and certain entertainment activities are taxed. The best way to know is to ask the service provider before you pay, or check your receipt afterward.