Tennessee's statewide sales tax rate is 9.55 percent

Tennessee has a combined state and local sales tax rate of 9.55 percent, but the exact amount you pay depends on which county and city you're in. The state itself collects 9.55 percent on most purchases, though some counties and municipalities add their own local taxes on top of that. When you buy something at a store, the total tax you see on your receipt reflects both the state rate and any local additions for your specific location.

The 9.55 percent figure is the statewide average, but it varies. Some counties charge less, and some charge more. For example, Davidson County (Nashville) has a combined rate of 9.55 percent, while other areas may differ slightly. The best way to know your exact rate is to check with your local tax assessor's office or look at a recent receipt from a purchase in your area.

Key Takeaways

  • Tennessee's combined state and local sales tax averages 9.55 percent, but the exact rate depends on your county and city.
  • Groceries, prescription medications, and medical devices are generally exempt from sales tax in Tennessee.
  • Services like haircuts, repairs, and professional fees are usually not subject to sales tax, though some exceptions exist.
  • Online purchases from out-of-state sellers may or may not have Tennessee sales tax added, depending on the seller's location and tax collection policies.

What items are exempt from Tennessee sales tax

Tennessee excludes certain categories of items from sales tax. Groceries and food items purchased for home consumption are not taxed, which means your grocery store bill is typically tax-free. This includes items like bread, milk, vegetables, and meat. However, prepared foods, restaurant meals, and items bought at a deli counter are taxed.

Prescription medications are also exempt from sales tax in Tennessee. If you buy a prescription drug at a pharmacy with a valid prescription, you will not pay sales tax on it. Over-the-counter medications like cold medicine or pain relievers are taxed as regular retail items.

Medical devices and equipment prescribed by a doctor—such as wheelchairs, hearing aids, or diabetic testing supplies—are generally exempt. Clothing is taxed in Tennessee, so you will pay sales tax on shirts, pants, and shoes. The exemptions are fairly narrow, so when in doubt, assume an item is taxable unless it falls into one of these specific categories.

How local taxes affect your total rate

Tennessee allows counties and cities to add their own local sales taxes on top of the state rate. This means two people buying the same item in different parts of Tennessee may pay different total tax amounts. A purchase in one county might have a 9.55 percent tax, while the same purchase in another county could be 9.45 percent or 9.65 percent.

Local taxes are set by individual county commissions and city councils, so they can change when those bodies vote to raise or lower rates. If you move to a different county or frequently shop in multiple areas, the tax rate you encounter may shift. Your receipt will always show the exact tax charged, so you can see what rate applied to that specific purchase.

Services and what gets taxed

Most services in Tennessee are not subject to sales tax. A haircut, car repair, plumbing work, or dental cleaning typically does not have sales tax added to the bill. Professional services—accounting, legal information, consulting—are also generally tax-free. The rule is that you pay sales tax on tangible goods (things you can touch), not on labor or services.

However, some services do cross into taxable territory. If you buy a service that includes a product—like a car wash that includes a wax product, or a salon that sells you shampoo along with a haircut—the product portion may be taxed. Repair services that include parts can be tricky: the labor is usually not taxed, but the parts themselves may be. Always ask the business to itemize your bill if you want to know exactly what is and is not taxed.

Online purchases and out-of-state sellers

When you buy from an online retailer based outside Tennessee, whether sales tax is added depends on that company's policies and where they are located. Large national retailers like Amazon typically collect Tennessee sales tax on orders shipped to Tennessee addresses, even though the company is based elsewhere. Smaller out-of-state sellers may not collect Tennessee tax, in which case you technically owe the tax yourself (though this is rarely enforced for individual purchases).

The rule changed in recent years, and most major online sellers now collect sales tax for Tennessee purchases. If you receive an order without tax added and the seller was based in another state, check your receipt or the seller's tax policy. Some sellers will refund the difference if you contact them, but many will not. When shopping online, assume tax will be added unless the seller's checkout page clearly states otherwise.

How sales tax is collected and used

When you pay sales tax at a store, the business collects it and sends it to the Tennessee Department of Revenue. The state then distributes the revenue to state programs and to local governments. Counties and cities use their portion of local sales tax for schools, roads, public safety, and other services. The tax is collected at the point of sale—when you buy the item—not later.

Businesses are responsible for collecting the correct tax rate for their location and remitting it to the state. If a business charges you the wrong rate, you can contact the Department of Revenue to report it, though getting a refund on a single purchase is usually not practical. Keeping your receipt is useful if you ever need to verify what tax was charged.

Frequently Asked Questions

Is Tennessee sales tax higher or lower than other states?

Tennessee's 9.55 percent combined rate is in the middle range compared to other states. Some states have no sales tax at all, while others charge 10 percent or more. Tennessee's rate is moderate, though it varies by location within the state.

Do I pay sales tax on used items?

Yes, used goods sold by a business are subject to sales tax in Tennessee. A used car, used furniture, or used electronics purchased from a dealer will have tax added. Private sales between individuals typically do not involve sales tax, but a business reselling used items must collect it.

What if a store charges me the wrong tax rate?

If you believe you were overcharged, keep your receipt and contact the store's manager first. If the error is not corrected, you can file a complaint with the Tennessee Department of Revenue. For a single small purchase, the effort may not be worth the refund, but systematic overcharging should be reported.

Do I owe Tennessee sales tax on items I buy while traveling out of state?

No. You owe sales tax in the state where you make the purchase. If you buy something in Georgia, you pay Georgia's sales tax. Tennessee does not tax purchases made in other states, even if you bring them home to Tennessee.

Are there any other taxes I should know about besides sales tax?

Tennessee has no state income tax, which is one reason the state relies on sales tax. However, you may encounter other taxes like hotel occupancy tax (added to hotel bills), gasoline tax (built into the pump price), and property tax (if you own real estate). Sales tax is the most common tax you will encounter as a shopper.