Tennessee Sales Tax Guide: Rate, Rules & Filing

Tennessee levies a 7% state sales tax — one of the highest state-level rates in the US — and local taxes add up to 2.75%, for combined rates as high as 9.75%.

To find the combined rate for a specific address, use our US sales tax calculator.

Tennessee economic nexus applies once your sales into the state exceed $100,000 over the preceding 12 months. There is no transaction-count trigger. Physical presence creates nexus immediately.

Beginning October 1, 2020, a Tennessee marketplace facilitator that makes or facilitates more than $100,000 in sales to Tennessee consumers in the previous 12-month period must register and collect and remit Tennessee sales tax on those facilitated sales, combining its own and facilitated sales to test the threshold. A facilitator that exceeds the threshold must begin collecting on the first day of the third month after the month in which it was met, and the facilitator is treated as the seller and retailer of record, so the underlying marketplace seller is not liable for tax the facilitator collects. An out-of-state marketplace seller need not register in Tennessee when all of its taxable sales run through a collecting facilitator, and those facilitated sales do not count toward the seller's own registration threshold.[11]

Tennessee assigns monthly, quarterly, or annual filing based on tax volume. Returns are due the 20th of the month following the reporting period. Most businesses file and pay through TNTAP. For the portal, return, and step-by-step, see our guide to filing Tennessee sales tax online.

Tennessee taxes groceries at a reduced 4% state rate (plus local tax) rather than exempting them. Prescription drugs are exempt. SaaS is fully taxable in Tennessee, including remotely accessed software.

Tennessee automatically issues registered retailers a Certificate of Resale, which a dealer gives suppliers to buy inventory tax-free [7]. Dealers can retrieve and verify their blanket resale certificate through TNTAP by location [7].

For the official form, multistate certificate rules and expiry, see the Tennessee resale certificate guide.

Late filing or payment carries a penalty of 5% of the tax due for each 30-day period, up to a 25% maximum, with a $15 minimum. Interest accrues from the due date. Our Tennessee filing guide lists late filing penalties, interest, and what to do if you missed a return.

You can dispute a Notice of Proposed Assessment through an optional informal conference with the Department [8]. To contest a final assessment in court, you file suit in Chancery Court within 90 days [8].

• [1] Tennessee DOR — Sales and Use Tax Rates (7% state, local)

• [2] Tennessee DOR — Out-of-State Dealer Nexus (economic nexus)

• [3] Tennessee DOR — Remotely Accessed Software (SaaS taxable)

• [5] Tennessee DOR — Food and Food Ingredients (reduced 4% rate)

• [6] Tennessee DOR — Specified Digital Products (taxable)

• [7] Tennessee DOR — Sale for Resale (Resale Certificate)

• [8] Tennessee DOR — Informal Conference and Appeals

• [9] Tennessee DOR — 2026 Sales Tax Holiday

• [10] Tennessee DOR — Registering for a Sales and Use Tax Account (TNTAP)

• [11] Tennessee Department of Revenue — Out-of-State Dealers & Marketplace Facilitators

Verified July 2026 against Tennessee Department of Revenue published guidance.

• Tennessee Sales Tax in Greene County on Food Products: A Breakdown
• Understanding Tennessee Sales Tax on Clothing: A Guide for Businesses
• What Is Exempt from Tennessee Sales Tax? A 2026 Guide for Businesses