Tennessee has a statewide sales tax of 7 percent, plus local taxes that vary by county

Tennessee charges a 7 percent state sales tax on most goods and some services. On top of that, your county and city add their own local sales taxes, which range from 1.75 to 2.75 percent depending on where you live. Your total sales tax bill can be anywhere from 8.75 to 9.75 percent, depending on your location.

The state does not tax groceries, prescription medications, or medical equipment. Some services—like haircuts, repairs, and professional fees—are also exempt. But clothing, electronics, furniture, and prepared food are taxed at the full rate.

Key Takeaways

  • Tennessee's state sales tax is 7 percent, and every county adds a local tax on top of that, raising your total to between 8.75 and 9.75 percent.
  • Groceries and prescription drugs are not taxed, but clothing, electronics, and restaurant meals are subject to the full rate.
  • Local tax rates vary by county, so the amount you pay depends on where you make the purchase.
  • Online purchases from out-of-state sellers are subject to Tennessee sales tax if the seller has a physical presence in the state.

How local sales tax rates work in Tennessee

Tennessee divides sales tax into two layers: the state portion (7 percent) and the local portion (1.75 to 2.75 percent). The local portion goes to your county and city government. Davidson County (Nashville) charges 2.25 percent local tax, bringing the total to 9.25 percent. Shelby County (Memphis) charges 2.25 percent as well. Smaller counties may charge less.

The rate you pay is determined by where the sale happens, not where you live. If you buy something in one county and live in another, you pay the tax rate of the county where you made the purchase. Online retailers calculate tax based on the shipping address.

What is and is not taxed in Tennessee

Tennessee exempts groceries—items you buy at the supermarket to cook at home—from sales tax. This includes bread, milk, eggs, vegetables, meat, and canned goods. Prepared food is taxed: restaurant meals, deli items, and hot foods from a grocery store counter are all subject to sales tax.

Prescription medications and medical devices (like diabetic supplies or hearing aids) are not taxed. Over-the-counter medicines and vitamins are taxed. Clothing and shoes are taxed at the full rate. Services like haircuts, auto repairs, and plumbing are taxed, but professional services like accounting or legal information are not.

Sales tax on online and out-of-state purchases

If you buy something online from a company with a warehouse, office, or other physical location in Tennessee, you owe Tennessee sales tax on that purchase. This applies even if the company is based elsewhere. Amazon, Walmart, and most major retailers have a presence in Tennessee, so purchases from them are taxed.

If you buy from a small out-of-state seller with no Tennessee location, Tennessee does not require that seller to collect tax. However, Tennessee law says you are supposed to pay "use tax" on those purchases yourself when you file your state income tax return. In practice, most individuals do not report these purchases, and the state does not pursue individual taxpayers for small amounts.

Who collects and where the money goes

The retailer collects sales tax at the point of sale and sends it to the Tennessee Department of Revenue. The state keeps the 7 percent portion and distributes the local portion to your county and city. Counties use this money for schools, roads, public safety, and other services.

Retailers are responsible for collecting the correct amount based on the location of the sale. If a retailer fails to collect or remit sales tax, the state can audit them and assess penalties.

Sales tax on vehicles and large purchases

Tennessee charges sales tax on vehicle purchases at the time you register the vehicle with the Department of Motor Vehicles, not at the dealership. The tax is calculated on the purchase price of the vehicle. If you trade in an old vehicle, the trade-in value reduces the taxable amount.

Real estate (land and houses) is not subject to sales tax. However, if you hire a contractor to build or renovate a home, the materials and labor are taxed. Some counties offer exemptions for certain types of construction or renovation, so check with your local assessor's office if you are planning a large project.

How to find your local sales tax rate

Your total sales tax rate depends on your county and sometimes your city. The Tennessee Department of Revenue publishes a list of all local rates by county on its website. You can also call your county assessor's office or check your county's website.

If you run a business or manage inventory, knowing your exact local rate matters for pricing and accounting. If you are a consumer, you will see the total rate applied at checkout—you do not need to calculate it yourself.

Frequently Asked Questions

Is Tennessee sales tax the same everywhere in the state?

No. The state tax is always 7 percent, but local taxes range from 1.75 to 2.75 percent depending on your county. Your total rate is between 8.75 and 9.75 percent. Check your county's rate on the Tennessee Department of Revenue website.

Do I have to pay sales tax on groceries?

No. Groceries—food you buy to cook at home—are not taxed. Prepared food, restaurant meals, and hot deli items are taxed at the full rate.

What about sales tax on clothes and shoes?

Clothing and shoes are taxed at the full state and local rate in Tennessee. There is no clothing exemption.

Do I owe tax on things I buy from out-of-state websites?

If the seller has a physical presence in Tennessee, yes—you owe tax. If the seller has no Tennessee location, Tennessee law says you should pay use tax on your state income tax return, but this is rarely enforced for individual shoppers.

Is there a sales tax on services like haircuts or car repairs?

Yes. Most services, including haircuts, auto repairs, and plumbing, are taxed at the full rate. Professional services like accounting or legal information are not taxed.