This blog was last updated on October 15, 2026
At-a-Glance: Tennessee Sales Tax
Tennessee imposes a 7% state sales and use tax on most tangible personal property, taxable services and other taxable products. Local option rates vary by jurisdiction from 1.50% to 2.75%, and the applicable local rate must be determined for the transaction. Some products and services are subject to special rates or limitations.
| Topic | General rule |
| General state rate | 7% for most taxable products and services |
| Local option rate | 1.50% to 2.75%, depending on jurisdiction |
| Remote-seller threshold | More than $100,000 in Tennessee sales during the previous tax year; include exempt retail sales and exclude sales for resale |
| Electronic filing | Sales and use tax returns and payments must be submitted electronically |
| Primary filing portal | Tennessee Taxpayer Access Point (TNTAP) |
What is taxable in Tennessee?
Tennessee sales tax generally applies to retail sales, leases and rentals of tangible personal property and to services, software, amusements and digital products that are specifically taxable under state law. Use tax generally applies when a taxable item is purchased without Tennessee sales tax and is stored, used or consumed in the state.
Common taxable categories include:
- Clothing and other tangible personal property
- Prewritten computer software
- Repairs and installation of tangible personal property or computer software
- Telecommunications and television programming services
- Specified digital products and video game digital products
Sales Tax Nexus in Tennessee
A seller may have a Tennessee sales tax collection obligation through physical presence or economic activity in the state.
Physical nexus
Physical presence may arise from activities such as maintaining a store, office, warehouse, showroom or other place of business in Tennessee; leasing tangible personal property in the state; repairing, installing or assembling tangible personal property in the state; providing taxable services in Tennessee; or using in-state representatives or other in-state activities described by Tennessee law.
Economic nexus for remote sellers
An out-of-state dealer without physical presence has substantial nexus when its sales to Tennessee customers exceed $100,000 during the previous tax year. For the threshold calculation, the dealer should include all retail sales, including exempt retail sales, but exclude sales for resale.
A previously unregistered remote seller that exceeds the threshold must register and begin collecting and remitting Tennessee sales and use tax on the first day of the third month following the month in which the threshold is met. The obligation is not retroactive.
Exemptions and Exemption Certificates
Tennessee provides product-based, use-based and entity-based exemptions. The availability and documentation requirements depend on the specific transaction. Most entity-based exemptions require a special exemption certificate, while many product-based exemptions do not.
Examples may include qualifying purchases by agricultural operators, nonprofit organizations, government entities, industrial manufacturers and purchasers buying items for resale. A seller should obtain and retain the appropriate documentation when an exemption certificate is required.
Applications for agricultural, nonprofit and green energy exemptions can be submitted through TNTAP. Other exemption applications generally must be made through the taxpayer’s TNTAP account.
Filing and Payment Tequirements
Tennessee requires sales and use tax returns and associated payments to be submitted electronically. Businesses can file and pay through TNTAP or use an approved software vendor.
Remote sellers with no Tennessee business location that register through the Streamlined Central Registration System may file using the Streamlined Simplified Electronic Return (SER). Tennessee states that SER filing is not currently available to taxpayers with business locations in the state.
Shipping and delivery charges
Delivery charges are generally included in the sales price of a taxable good or service. As a result, delivery charges associated with a taxable sale are generally subject to tax. The treatment depends on the underlying transaction and the statutory sales-price rules.
How Tennessee Sources Sales
Tennessee should not be described categorically as either an origin-based or destination-based state. The applicable sourcing rule depends on the seller, transaction and delivery circumstances.
- Out-of-state dealers generally report sales using the customer’s ship-to or delivery address and apply the local rate for that destination.
- A marketplace facilitator with no physical Tennessee location generally uses the address where tangible personal property is shipped for facilitated sales.
- When a marketplace facilitator has a Tennessee physical location from which it facilitates a sale of tangible personal property, that facilitated sale may be sourced to the physical location.
- Services and specialized transactions may follow separate sourcing provisions.
Frequently asked questions
Is Tennessee a member of the Streamlined Sales Tax initiative?
Tennessee participates in the Streamlined Sales Tax (SST) system. Eligible remote sellers may use the Streamlined Central Registration System, and qualifying remote sellers may file a Streamlined Simplified Electronic Return.
Does Tennessee offer sales tax holidays?
Tennessee law provides sales tax holidays. Dates and eligible products can change, so businesses and consumers should verify the current holiday guidance published by the Tennessee Department of Revenue before relying on an exemption.
Are there other transaction-specific taxes or fees?
Yes. Tennessee and some local jurisdictions impose transaction-specific taxes or fees on selected products or services. Examples can include tire, telecommunications, emergency communications, alcoholic beverage and rental-related assessments. Applicability should be confirmed for the product, service and jurisdiction involved.
How do I register?
Businesses that are required to collect Tennessee sales tax can register through TNTAP. Remote sellers may also be eligible to register through the Streamlined Central Registration System.
Official resources
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