Tennessee has a statewide sales tax of 9.55 percent
Tennessee charges a sales tax of 9.55 percent on most goods you buy in the state. This rate combines the state sales tax (9.55 percent) with any local taxes your county or city adds on top. The exact total you pay depends on where you shop — some counties add their own local sales tax, which raises the final rate above the state baseline.
Unlike income tax, which Tennessee does not have on wages, sales tax is collected at the register when you make a purchase. The retailer collects it and sends it to the state. You cannot avoid it by shopping online if the seller has a physical location in Tennessee or meets certain sales thresholds — federal law now requires most online retailers to collect sales tax even if they ship from out of state.
A few categories of items are exempt from sales tax in Tennessee. Groceries for home consumption, prescription medications, and medical devices do not carry sales tax. Some services — like haircuts, repairs, and professional services — are also tax-free. But prepared food, restaurant meals, and non-prescription items are taxed at the full rate.
Key Takeaways
- Tennessee's statewide sales tax is 9.55 percent, but your actual rate may be higher if your county or city adds a local tax on top.
- Groceries, prescription medications, and medical devices are exempt from sales tax in Tennessee.
- Restaurant meals and prepared foods are taxed, even if you take them home.
- Online retailers must collect Tennessee sales tax if they meet federal sales thresholds, regardless of where they are located.
- Tennessee has no state income tax on wages, so sales tax is the primary way the state collects tax from residents.
How local taxes change your total rate
The 9.55 percent state rate is not the final number you see on your receipt. Counties and cities in Tennessee can add their own local sales tax, which stacks on top of the state rate. This means your actual sales tax can range from 9.55 percent in areas with no local tax to over 10 percent in counties that have added local rates.
For example, Davidson County (Nashville) has a combined rate of 9.55 percent, while Shelby County (Memphis) has a combined rate of 9.55 percent. Other counties may differ. The best way to find your exact rate is to check with your city or county tax assessor's office, or look at your last receipt — the tax rate is printed there.
Local taxes are often used to fund schools, roads, and public services in that specific area. When you move between counties or shop in a different city, the rate can change. If you buy something online and have it shipped to a Tennessee address, the tax rate applied is based on the delivery address, not where the seller is located.
What items are taxed and what are not
Most physical goods are subject to sales tax in Tennessee, but several important categories are exempt. Groceries for home consumption — items you cook at home like milk, bread, vegetables, and meat — are not taxed. This exemption does not explore to prepared foods, restaurant meals, or items you eat on the premises.
Prescription medications and medical devices prescribed by a doctor are also exempt. Over-the-counter medicines like cold medicine or pain relievers are taxed, even though they treat medical conditions. If you are unsure whether a specific medication is prescription or over-the-counter, ask the pharmacist — they can tell you whether it will be taxed at checkout.
Services are generally not taxed in Tennessee. A haircut, car repair, plumbing work, or accounting service does not carry sales tax. However, if you buy a physical product as part of that service — like a haircut plus a bottle of shampoo — the shampoo is taxed but the labor is not. Prepared food, including deli items, bakery goods, and restaurant takeout, is always taxed.
Online shopping and out-of-state purchases
If you order something online and have it shipped to Tennessee, you owe sales tax on that purchase. For many years, online retailers did not collect Tennessee sales tax unless they had a physical store in the state. That changed in 2018 when the U.S. Supreme Court ruled that states could require online sellers to collect sales tax based on sales volume, not physical presence.
Most major online retailers — Amazon, Walmart, Target, and others — now collect Tennessee sales tax automatically at checkout. Smaller sellers may not, depending on their sales volume and how their business is structured. If you buy from a small seller and no tax is collected, you are technically responsible for reporting that purchase on your state tax return, though few individuals do.
If you buy something from a seller outside the United States and have it shipped to Tennessee, you may owe customs duties and sales tax when it arrives. The carrier or customs broker will notify you if additional payment is required before the package is delivered.
Special situations and exemptions
Certain groups and purchases have special tax treatment in Tennessee. Nonprofit organizations, government agencies, and religious institutions can often purchase items without paying sales tax if they provide a resale certificate or tax-exempt status documentation. If you work for one of these organizations, ask your accounting department whether your purchases may have access to.
Manufacturing equipment and machinery used directly in production may be exempt from sales tax, though the rules are complex and depend on how the equipment is used. If you own a business and think your equipment qualifies, contact the Tennessee Department of Revenue for guidance.
Resale items — goods you buy to resell to customers — are not taxed if you provide a resale certificate to the seller. This prevents double taxation: the wholesaler does not charge you tax, and you collect tax from your customer instead. You must register as a seller with the state to use a resale certificate.
How to find your exact local rate
Your exact sales tax rate depends on your address. The easiest way to find it is to look at a recent receipt from any purchase in your area — the tax rate is printed there. You can also visit the Tennessee Department of Revenue website and use their sales tax rate lookup tool by entering your zip code or city name.
If you are moving to Tennessee or relocating within the state, check the rate for your new address before you move. Rates can vary significantly between neighboring counties, and knowing your local rate helps you budget for purchases. If you run a business, you need to know the exact rate for each location where you have customers, since you must collect the correct amount.
Frequently Asked Questions
Does Tennessee have income tax?
No. Tennessee does not tax wages or salaries. The state has no income tax on earned income, which is why sales tax is the primary way Tennessee collects tax from residents and visitors. Some states tax investment income or retirement income differently, but Tennessee does not tax those either.
Are clothes and shoes taxed in Tennessee?
Yes. Clothing and shoes are subject to the full sales tax rate in Tennessee. There is no clothing exemption, unlike some other states. This applies to all apparel, from everyday wear to formal clothing.
Do I pay sales tax on used items?
It depends on where you buy them. If you buy a used item from a licensed retailer or business, sales tax applies. If you buy from an individual in a private sale — like a garage sale or from a friend — no sales tax is collected. However, if you sell items yourself and do it regularly, you may need to register as a seller.
What if I buy something in another state and bring it to Tennessee?
You do not owe Tennessee sales tax on items you bought and paid tax on in another state. However, if you buy something in another state without paying that state's sales tax and bring it to Tennessee, you are not required to pay Tennessee tax on it after the fact. Sales tax is collected at the point of purchase, not when you cross state lines.
Are streaming services and digital downloads taxed?
Yes. Digital products like streaming subscriptions, e-books, music downloads, and software are subject to Tennessee sales tax. This applies whether you read the item or stream it. The tax is collected by the company providing the service.