Tennessee has a state sales tax of 7 percent
Tennessee charges a 7 percent state sales tax on most retail purchases. This is the baseline rate you will see on your receipt in every county. However, your total sales tax is usually higher because counties and cities add their own local taxes on top of the state rate.
The combined rate you actually pay depends on where you shop. In some counties, the total is 8.75 percent. In others, it reaches 9.55 percent. A few places charge even more. The state sets the floor at 7 percent, but local governments stack additional taxes on top.
Key Takeaways
- Tennessee's state sales tax is 7 percent, but your actual rate includes county and city taxes that push the total between 8.75 and 9.55 percent depending on location.
- Groceries, prescription medications, and medical equipment are exempt from sales tax in Tennessee.
- Online purchases from out-of-state sellers are subject to Tennessee sales tax if the seller has a physical presence in the state or meets federal thresholds.
- Local tax rates vary by county, so the same item costs different amounts in sales tax depending on which city or county you buy it in.
How local taxes stack on top of the state rate
When you buy something in Tennessee, you pay the 7 percent state tax plus whatever your county charges, plus whatever your city charges. These are separate taxes that add together on your receipt.
Shelby County (which includes Memphis) charges a combined rate of 9.55 percent. Davidson County (which includes Nashville) charges 9.55 percent. Knox County (which includes Knoxville) charges 9.45 percent. Hamilton County (which includes Chattanooga) charges 9.45 percent. But smaller counties and rural areas often have lower combined rates—some as low as 8.75 percent.
The difference matters. If you buy a $100 item in one county at 8.75 percent, you pay $8.75 in tax. The same item in another county at 9.55 percent costs $9.55 in tax. Over time and across multiple purchases, these differences add up.
What is exempt from sales tax in Tennessee
Not everything you buy in Tennessee is taxed. Groceries are exempt—food you cook at home is not subject to sales tax. This includes meat, produce, dairy, bread, and canned goods. It does not include prepared foods, restaurant meals, or items like candy and soft drinks.
Prescription medications are also exempt. If you have a prescription from a doctor, you do not pay sales tax on the medication itself. Over-the-counter medicines like aspirin or cold medicine are taxed.
Medical equipment prescribed by a doctor—such as wheelchairs, walkers, or oxygen equipment—is exempt. Hearing aids are exempt. Prosthetic devices are exempt. But items that are merely health-related, like vitamins or first-aid supplies you buy without a prescription, are taxed.
Sales tax on online and out-of-state purchases
If you order something online from a company that has a warehouse, office, or other physical location in Tennessee, you pay Tennessee sales tax. The seller collects it at checkout, just as they would in a physical store.
If you order from a seller with no physical presence in Tennessee, the rules depend on the seller's size. Large online retailers—those with annual sales over a certain threshold—must collect Tennessee sales tax even if they have no location in the state. Smaller sellers may not be required to collect it, though Tennessee law says you are technically responsible for paying the tax yourself when you file your state return.
In practice, most people do not report and pay this tax on their own. The state focuses enforcement on large sellers rather than individual buyers.
How sales tax differs from income tax
Tennessee has no state income tax on wages or salaries. This is one of the reasons the state relies heavily on sales tax to fund government services. You do not pay state income tax on money you earn from a job.
However, Tennessee does tax investment income—dividends, capital gains, and interest—at 6 percent. This is called the Hall income tax, and it applies only to investment earnings, not wages. Most working people do not owe this tax because their income comes from employment.
Because Tennessee has no wage income tax, the state makes up the difference through sales tax, which means the tax burden falls more heavily on people who spend money rather than those who save it.
Sales tax on specific items and services
Clothing is taxed at the full rate. Shoes are taxed. Accessories are taxed. There is no clothing exemption in Tennessee, unlike some other states.
Gasoline is taxed, though the state fuel tax is separate from sales tax. You pay both. Utilities—electricity, water, natural gas—are taxed at the full rate.
Services are generally not taxed in Tennessee. If you hire a plumber, electrician, or contractor, you do not pay sales tax on their labor. You pay sales tax only on materials they sell you as part of the job. Haircuts and salon services are not taxed. Car repairs are not taxed, though parts you buy separately are.
Where to find your local sales tax rate
The Tennessee Department of Revenue publishes a complete list of combined sales tax rates by county and city. You can search by zip code or county name to find your exact rate. The rates change occasionally when local governments adjust their taxes, so checking the official list is more reliable than relying on memory.
If you are moving to Tennessee or shopping in a different county, the Department of Revenue website will show you the exact rate you will pay. This is useful if you are making a large purchase and want to know the total cost before you go to the store.
Frequently Asked Questions
Do I pay sales tax on used items?
Sales tax on used items depends on where you buy them. If you buy from a used goods store or reseller, you pay sales tax. If you buy directly from another person—a private sale—you typically do not pay sales tax, though you are technically responsible for reporting it to the state.
Is there a sales tax on services like haircuts or car repairs?
No. Labor and services are not taxed in Tennessee. You pay sales tax only on materials—for example, if a salon sells you a bottle of shampoo, that is taxed, but the haircut itself is not. The same applies to car repairs: the mechanic's labor is not taxed, but parts are.
What happens if I buy something online from another state?
If the seller has no physical presence in Tennessee and is not required to collect sales tax, you are technically responsible for paying Tennessee sales tax yourself. However, enforcement on individual buyers is rare. Large online retailers are required to collect the tax regardless of where they are located.
Can I get a sales tax refund if I move out of Tennessee?
No. Tennessee does not offer refunds on sales tax you have already paid. Once the purchase is complete and the tax is collected, it cannot be refunded based on a change in residency.
Are there any counties in Tennessee with no sales tax?
No. Every county in Tennessee has at least the 7 percent state sales tax, plus local additions. The lowest combined rates are around 8.75 percent, but there is no county with zero sales tax.