Tennessee Sales Tax Calculator 2026

Understanding Tennessee Sales Tax

Tennessee imposes a statewide sales tax rate of 7% on most retail purchases. This is one of the highest state rates in the country. When you add local taxes from cities and counties, consumers in some parts of Tennessee can face combined rates exceeding 10.0%.

State Rate vs. Local Rate

The 7% rate is just the state portion. Tennessee allows cities, counties, and special taxing districts to levy additional sales taxes. These local rates typically range from 0.5% to 3%, though some areas go higher. The combined rate — state plus local — is what you actually pay. To find the exact rate for your address, use the Tennessee Department of Revenue's rate lookup tool or enter your local rate in our calculator above.

How to Calculate Tennessee Sales Tax

The formula is straightforward: multiply the purchase price by the tax rate expressed as a decimal. For a $100.00 purchase at the 7% state rate:

• $100.00 × 0.0700 = $7.00 in state tax
• Total: $100.00 + $7.00 = $107.00

If your city adds a 2% local tax, the combined rate becomes 9.00%, and the tax on $100.00 jumps to $9.00. That local portion adds up fast on large purchases.

Common Exemptions in Tennessee

Not everything is taxable. Tennessee, like most states, exempts certain categories of goods from sales tax. Here are the most common:

Groceries: Tennessee taxes groceries at a reduced rate, lower than the standard 7% state rate. Check with the Tennessee Department of Revenue for the current reduced grocery rate.

Clothing: Clothing is subject to the standard 7% state sales tax in Tennessee. Some states offer sales tax holidays for back-to-school clothing — check whether Tennessee participates.

Prescription Medication: Prescription medications are exempt from sales tax in Tennessee. Over-the-counter drugs and medical devices may or may not be taxable depending on Tennessee law — verify with the state tax authority.

Sales Tax on Vehicles and Large Purchases

Buying a car in Tennessee? The state sales tax of 7% applies to vehicle purchases, typically calculated on the purchase price or the fair market value, whichever is higher. On a $30,000 vehicle, that's $2100 in state tax alone before any local taxes. Some states offer trade-in credits that reduce the taxable amount — check whether Tennessee allows this deduction.

Online Purchases and Tennessee Sales Tax

Since the 2018 South Dakota v. Wayfair Supreme Court ruling, Tennessee requires out-of-state online retailers to collect sales tax once they exceed certain economic nexus thresholds. Most major online retailers now collect Tennesseesales tax automatically. If you buy from a seller who doesn't collect the tax, you are still legally required to report and pay use tax on your Tennessee tax return.

Filing Requirements for Businesses

Businesses making taxable sales in Tennessee must register with the state, collect the correct amount of sales tax at each transaction, and file returns on a monthly, quarterly, or annual basis depending on their volume. Late filing and underpayment can trigger penalties and interest. If you sell into Tennessee from another state, the economic nexus rules may require you to register even without a physical presence.

No Income Tax in Tennessee

Tennessee is one of the states with no personal income tax. This means the state relies more heavily on sales tax and other consumption taxes for revenue. The 7% sales tax rate is part of this trade-off — residents pay more on purchases but keep more of their earned income.