Tennessee has a state sales tax of 9.55 percent on most purchases

Tennessee charges a state sales tax of 9.55 percent on retail goods and many services. This rate is made up of a 4 percent state tax plus local taxes that vary by county and city — so the total you pay depends on where you shop. The state does not tax groceries, prescription medications, or medical equipment, but it does tax prepared food, clothing, and most other items you buy in stores.

The 9.55 percent figure is the statewide average. Your actual rate could be lower or higher depending on your location. For example, Davidson County (Nashville) has a combined rate of 9.55 percent, while some rural counties charge less. A few cities add their own local tax on top of the state and county rates, which can push the total above 10 percent.

Key Takeaways

  • Tennessee's state sales tax is 4 percent, but the total you pay includes local taxes that range from about 1.5 to 2.75 percent depending on your county and city.
  • Groceries and prescription medications are not taxed in Tennessee, but prepared food, restaurant meals, and over-the-counter medicines are.
  • Clothing and shoes are taxed at the full rate, unlike some states that exempt them.
  • You can find your exact local rate by entering your address on the Tennessee Department of Revenue website or asking a cashier.

What is and is not taxed in Tennessee

Tennessee taxes most things you buy, but there are important exceptions. Unprepared groceries — raw meat, vegetables, bread, milk, and canned goods — are not taxed. Once food is prepared or ready to eat, the tax applies. A sandwich from a deli counter is taxed; a loaf of bread from the shelf is not. Restaurant meals, fast food, and food from a hot bar all carry the full sales tax.

Medications are split the same way. Prescription drugs are not taxed, but over-the-counter medicines like pain relievers, cold medicine, and allergy pills are taxed as regular goods. Medical equipment prescribed by a doctor — such as wheelchairs, hearing aids, or diabetic supplies — is also exempt.

Clothing and shoes are taxed at the full rate. Tennessee does not exempt apparel the way some states do. A pair of jeans, a winter coat, or work boots all carry the 9.55 percent average tax (plus your local rate).

How local taxes are added to the state rate

Tennessee's 4 percent state tax is only part of what you pay. Every county adds its own tax, and some cities add a third layer. The county rate ranges from about 1.5 to 2.75 percent depending on where you live. A few cities — including Nashville, Memphis, and Knoxville — add a city tax on top of that.

This means two people buying the same item in different parts of Tennessee will pay different amounts. Someone in Shelby County (Memphis) might pay 9.55 percent total, while someone in a rural county might pay 8.75 percent. The difference adds up if you are buying something expensive.

You can find your exact rate by visiting the Tennessee Department of Revenue website and entering your address, or by asking a cashier where you shop. Many stores display the local rate at the register or on their website.

Sales tax on services in Tennessee

Tennessee taxes some services but not others. Repair and installation services are taxed — if you pay someone to fix your car, repair your appliances, or install new flooring, that labor is subject to sales tax. Haircuts and salon services are taxed. Dry cleaning is taxed.

However, professional services like accounting, legal information, and medical care are generally not taxed. If you pay a lawyer to review a contract or a doctor for an office visit, no sales tax is added. The line between a taxed service and an untaxed one can be unclear, so if you are unsure about a specific service, ask the business or contact the Tennessee Department of Revenue.

Online purchases and out-of-state sellers

Tennessee requires online retailers to charge sales tax on purchases shipped to a Tennessee address, even if the seller is based out of state. Large online retailers like Amazon, Walmart, and Target already collect and send this tax to Tennessee. Smaller sellers may not, depending on their size and sales volume.

If you buy something online and no tax was charged, you are technically responsible for reporting and paying the tax yourself when you file your Tennessee income tax return — though most people do not. The practical effect is that some online purchases are taxed and some are not, depending on the seller's size and whether they have registered with Tennessee.

Who collects and where the money goes

Retailers collect sales tax at the point of sale and send it to the Tennessee Department of Revenue. The state keeps the 4 percent state portion and distributes the local taxes to the counties and cities where the purchases were made. This is why stores need to know your location — the tax money goes to the local government where you live or shop.

Businesses file sales tax returns monthly or quarterly, depending on their size and sales volume. The Tennessee Department of Revenue publishes the total sales tax collected each month, which is used to fund state and local services.

Frequently Asked Questions

What is the sales tax rate in my city?

Your rate depends on your county and city. The statewide average is 9.55 percent, but it varies. Use the Tennessee Department of Revenue's tax rate lookup tool on their website, or call your local tax assessor's office. You can also ask a cashier at any store in your area.

Are groceries taxed in Tennessee?

Unprepared groceries like raw meat, vegetables, bread, and milk are not taxed. Prepared or ready-to-eat food — deli sandwiches, hot bar items, restaurant meals — is taxed at the full rate. Over-the-counter medicines are also taxed, but prescription drugs are not.

Do I have to pay sales tax on clothes?

Yes. Tennessee taxes clothing and shoes at the full sales tax rate. Unlike some states, there is no clothing exemption in Tennessee.

Do I owe sales tax on things I buy online?

Large online retailers are required to collect and send sales tax to Tennessee. Smaller sellers may not. If you buy something online with no tax charged, you are technically responsible for reporting it on your tax return, though enforcement is rare for individual purchases.

Is labor taxed when I hire someone to fix something?

Yes. Repair, installation, and labor services are subject to sales tax in Tennessee. If you hire someone to fix your car, install flooring, or repair an appliance, the labor portion is taxed along with any parts.