Tennessee Sales Tax Rate and What It Covers
Tennessee has a state sales tax of 4.55 percent, but the total tax you pay at checkout is usually higher because counties and cities add their own local taxes on top. The combined rate ranges from 8.55 percent to 9.55 percent depending on where you shop. Some counties charge closer to 8.55 percent, while others reach 9.55 percent or slightly higher.
Sales tax in Tennessee applies to most goods you buy in stores — clothing, groceries, electronics, furniture, and household items all get taxed. Services are generally not taxed, which means haircuts, car repairs, and plumbing work do not have sales tax added. Groceries are taxed at the full rate, unlike some states that tax food at a lower percentage or not at all.
A few items are exempt from sales tax in Tennessee. These include prescription medications, medical equipment prescribed by a doctor, and certain agricultural supplies. If you are buying something you think should be exempt, ask the store or check the Tennessee Department of Revenue website for the full list.
Key Takeaways
- Tennessee's state sales tax is 4.55 percent, but your actual tax rate depends on your county and city, ranging from 8.55 percent to 9.55 percent total.
- Sales tax applies to most goods including groceries, but not to services like haircuts or car repairs.
- Prescription medications and certain medical equipment are exempt from sales tax in Tennessee.
- The tax you see on your receipt includes both state and local portions, and the local portion goes to your county and city government.
- Online purchases from out-of-state sellers may or may not have Tennessee sales tax added depending on the seller's location and size.
How Local Sales Tax Works in Your County
Every county in Tennessee adds its own local sales tax on top of the state rate. Your county's local rate depends on decisions made by your county commission and city council. Some counties have set their local tax at 1.5 percent, while others go as high as 2.75 percent or more. This is why the total you pay in Memphis differs from what you pay in Nashville or Knoxville.
When you buy something, the store collects all the tax — state and local combined — and sends the state portion to the Tennessee Department of Revenue. The local portion goes to your county and city governments, which use it to fund schools, roads, police, and other services. You do not pay the state and local taxes separately; the store adds them together and shows one total on your receipt.
If you live in one county but shop in another, you pay the sales tax rate of the county where you make the purchase, not where you live. This matters most for people who live near county lines and shop across them regularly.
What Happens When You Buy Online
Online sales tax rules changed significantly in recent years. If you buy from a large online retailer like Amazon, the seller is required to collect and send Tennessee sales tax to the state, even though you are not shopping in a physical store. The tax rate applied is usually based on your shipping address.
Smaller online sellers — those with very low sales volume or no physical presence in Tennessee — may not collect Tennessee sales tax at checkout. In those cases, Tennessee law says you are supposed to pay the tax yourself when you file your state tax return, though most people do not. This is called "use tax" and it is the same rate as sales tax.
If you order something online from outside the United States, you may owe additional taxes and duties when the package arrives, but that is a federal customs issue, not Tennessee sales tax.
Sales Tax on Specific Purchases
Groceries are taxed at the full state and local rate in Tennessee, unlike states that tax food at a reduced rate or not at all. This includes items like bread, milk, eggs, vegetables, and meat. Restaurant meals and prepared foods are also taxed, and the tax is calculated on the pre-tip amount.
Clothing and shoes are taxed normally in Tennessee. There is no clothing exemption, so a shirt or pair of jeans gets the full sales tax added. Motor vehicles are taxed, but the tax is calculated differently — you pay sales tax based on the purchase price when you register the vehicle with the state, not at the dealership.
Gasoline is taxed, but the tax is built into the price per gallon rather than added at the pump. Utilities like electricity and water are not subject to sales tax. Cigarettes and alcohol have their own excise taxes in addition to sales tax.
Who Collects and Where the Money Goes
Stores and online sellers are responsible for collecting sales tax from you at the point of sale. They then file reports with the Tennessee Department of Revenue showing how much tax they collected and send the state portion to the department. The local portion goes directly to the county or city where the sale occurred.
The state uses sales tax revenue for general operations and services. Counties and cities use their portion for schools, public safety, infrastructure, and other local needs. The breakdown of how much each local government receives depends on the tax rate they set and the total sales in their area.
If a store fails to collect or send sales tax, the state can audit them and impose penalties. As a customer, you are not responsible for checking whether the store collected the tax correctly — that is between the store and the state.
Sales Tax Refunds and Special Situations
If you overpay sales tax — for example, if a store charges you the wrong rate by mistake — you can ask the store for a refund. Most stores will correct the error on the spot if you catch it before you leave. If you discover the error later, contact the store's customer service department with your receipt.
Certain organizations are exempt from paying sales tax. These include federal, state, and local government agencies, schools, and some nonprofits. If your organization qualifies for an exemption, you need to provide the seller with a resale certificate or exemption certificate before making the purchase. The seller will not collect tax if you show the proper documentation.
Businesses that buy items to resell do not pay sales tax on those purchases if they provide a resale certificate to the seller. The tax is instead paid by the final customer when they buy the finished product.
Frequently Asked Questions
What is the total sales tax rate where I live?
Your total rate is 4.55 percent state tax plus your county and city local tax. To find your exact rate, search "Tennessee sales tax rate" plus your city name, or call your county tax assessor's office. Rates range from 8.55 percent to 9.55 percent statewide, but your specific location may differ.
Do I have to pay sales tax on used items?
Yes, used items sold by a business are subject to sales tax in Tennessee. If you buy a used car from a dealership, a used phone from a retailer, or used furniture from a store, sales tax applies. Private sales between individuals typically do not have sales tax, but sales through a business do.
Is there sales tax on services like haircuts or car repairs?
No, most services are not subject to sales tax in Tennessee. Haircuts, car repairs, plumbing, electrical work, and similar services do not have sales tax added. However, if you buy a product as part of the service — like hair products at a salon or parts at a repair shop — the product portion may be taxed.
What if I buy something in Tennessee but live in another state?
You pay Tennessee sales tax on the purchase because tax is based on where the sale occurs, not where you live. If you are a resident of another state, you may be able to claim a credit for Tennessee sales tax on your home state's tax return, but that depends on your state's rules.
Can I get a sales tax refund when I leave Tennessee?
Tennessee does not have a sales tax refund program for tourists or visitors. Unlike some countries and a few U.S. states, Tennessee does not refund sales tax to people leaving the state. The tax you pay is final.