Tennessee Sales Tax Rates and What They Apply To

Tennessee's statewide sales tax rate

Tennessee's statewide sales tax is 9.55%. This rate applies to most goods and services you buy across the state. However, your actual tax at checkout may be higher because counties and cities add their own local sales taxes on top of the state rate.

The 9.55% breaks down into a 4% state rate plus a 5.55% local rate that varies by county. When you make a purchase, you pay both layers together as one combined tax. A receipt will show the total tax charged, but it won't always break out which portion is state and which is local.

Key Takeaways

• Tennessee's combined state and local sales tax is 9.55%, though your county or city may add additional local taxes that raise the total.
• The state portion is 4%, and counties contribute 5.55% on average, but this local portion varies significantly by location.
• Groceries, prescription medications, and certain medical equipment are exempt from sales tax in Tennessee.
• Some services like haircuts, repairs, and professional fees are taxable in Tennessee, unlike in some other states.
• The tax you pay depends on where the sale happens, not where you live, so traveling between counties can mean different tax rates.

How local taxes change your total rate

While the state rate is fixed at 4%, each county and city in Tennessee sets its own local sales tax rate. This means the total you pay can range from around 8.5% in some areas to over 10% in others. For example, Davidson County (Nashville) has a combined rate of 9.55%, while some rural counties may have lower totals.

When you shop, the tax rate that applies is the one where the store is located, not where you live. If you buy something in one county and it's shipped to another, the tax is based on the delivery address. This matters most if you live near a county line or do significant shopping across different areas.

What is and isn't taxed in Tennessee

Groceries and food items for home consumption are not taxed in Tennessee. This includes items like bread, milk, vegetables, and meat from a grocery store. However, prepared foods and restaurant meals are taxed at the full rate.

Prescription medications and certain medical devices are also exempt. Over-the-counter medicines like cold medicine or pain relievers are taxed, but prescription drugs are not. Some medical equipment used for specific health conditions may may have access to for exemption as well.

Services are generally taxable in Tennessee, which sets it apart from some states. A haircut, car repair, plumbing work, or accounting service all have sales tax applied. Utilities like electricity and natural gas are taxed at a lower rate of 4% (state only, no local add-on).

Clothing and back-to-school purchases

Clothing items are taxed at the regular rate in Tennessee. There is no special exemption for back-to-school clothing or shoes, even during back-to-school season. A shirt, pants, or pair of shoes purchased in August is taxed the same as one purchased in January.

This differs from states like New York or Florida that offer temporary tax holidays on clothing during certain times of year. In Tennessee, you pay the full combined rate whenever you buy apparel.

Online and out-of-state purchases

If you order something online from a retailer that has a physical presence in Tennessee, sales tax is charged at checkout. Large online retailers like Amazon collect Tennessee sales tax on most items shipped to addresses in the state.

Smaller online sellers may not collect Tennessee sales tax, though the state encourages residents to report these purchases and pay use tax (a companion tax) on their state income tax return. In practice, most people do not do this. The rules around which sellers must collect tax change frequently, so the safest approach is to assume tax will be charged if the seller operates in Tennessee.

How sales tax appears on your receipt

Your receipt will show the subtotal, the tax amount, and the final total. The tax line may say "Sales Tax," "Tax," or "ST" depending on the retailer. Some receipts break down state and local portions separately, but many show only the combined total.

If you need to know the exact breakdown for record-keeping or business purposes, you can contact the store or check your county's tax rate online. The Tennessee Department of Revenue website lists the current rate for each county, though it does not always show city-level additions.

Frequently Asked Questions

Is Tennessee sales tax higher or lower than other states?

Tennessee's combined rate of 9.55% is above the national average of around 7.2%. However, Tennessee has no state income tax, which offsets the higher sales tax for many residents. Some states with lower sales tax rates have higher income taxes instead.

Do I pay sales tax on used items?

Used items sold by a business are taxed the same as new items. If you buy a used car from a dealership or used furniture from a store, sales tax applies. Private sales between individuals typically do not have sales tax, though this varies by item type.

What if the tax rate changes between when I shop and when I check out?

Tax rates in Tennessee change infrequently. When they do change, the new rate takes effect on the date announced by the county or city. The rate that applies is the one in effect on the date of your purchase, not the date you planned to shop.

Can I get a sales tax refund if I overpaid?

If a store charges you the wrong tax amount, contact the store directly. Most will issue a refund or credit if you can show the error on your receipt. For larger discrepancies, you can file a claim with the Tennessee Department of Revenue, though this is uncommon for individual purchases.

Do nonprofits and churches pay sales tax?

Nonprofits and religious organizations can obtain a resale certificate that exempts them from sales tax on items they purchase for their operations. They must register with the Tennessee Department of Revenue and follow specific rules about what qualifies for exemption.