Tennessee Sales Tax Guide 2025

Simplify Tennessee sales tax compliance with this guide, offering insights on rates, exemptions, and filing requirements. Keep your business in good standing with state regulations.

Tennessee Sales Sax

Tennessee sales tax law, enacted in 1947, governs the taxation of goods and services across the state. Sales tax in Tennessee includes a base rate and local taxes, with Tennessee sales and use tax regulations enforced by the Department of Revenue to ensure compliance.

Tennessee Sales Tax Rate

Jurisdiction	Sales tax rate
State tax	7.0%
Local tax	0.0%-3.0%
Combined Tax	7.0% - 10.0%

Learn more and check out the city-based tax rates in Tennessee.

Tennessee Sales Tax Calculator

A Tennessee sales tax calculator helps retailers accurately compute the sales tax by applying the state’s base rate of 7% and any applicable local rates, which can vary by location. Retailers can use this tool to ensure compliance with Tennessee sales tax law.

Example: A retailer in Nashville sells a product for $100, and the local sales tax rate in Nashville is 2.25%.

1. State Sales Tax (7%): $100 × 0.07 = $7.00
2. Local Sales Tax (2.25%): $100 × 0.0225 = $2.25
3. Total Sales Tax: $7.00 + $2.25 = $9.25
4. Total Price (with tax): $100 + $9.25 = $109.25

Retailers can use calculators to simplify the process and ensure proper sales and use tax reporting to the Department of Revenue.

FAQs on Sales Tax

What is TN sales tax rate?

Tennessee’s state sales tax rate is 7%, with additional local rates ranging from 1.5% to 2.75%, depending on the jurisdiction.

How to calculate sales tax in Tennessee?

To calculate sales tax in Tennessee, multiply the item’s price by the combined state and local sales tax rate (e.g., $100 × 9.25% = $9.25).

Sales Tax Nexus in Tennessee ​

Type of Nexus	Threshold
Physical presence	Any physical presence
Economic nexus	$100,000 in gross sales
Marketplace nexus	$100,000 in gross sales

FAQs on Sales Tax Nexus

What is the sales tax nexus in Tennessee?

Sales tax nexus in Tennessee is the connection a business has with the state, requiring it to collect and remit sales tax, based on physical or economic presence.

What constitutes sales tax nexus in Tennessee?

Sales tax nexus in Tennessee is established through physical presence (e.g., office, employees) or economic activity, such as exceeding $100,000 in sales annually to customers in the state.

Tennessee Sales Tax Exemptions

Tennessee offers sales tax exemptions for specific goods, services, and entities, including prescription drugs, medical equipment, and certain agricultural products. Qualified organizations, such as nonprofits and government agencies, may also be exempt if they meet eligibility requirements.

Businesses claiming exemptions must maintain proper documentation, such as exemption certificates, for compliance. Accurate reporting of exempt sales is crucial when filing with the Tennessee Department of Revenue.

FAQs on Sales Tax Exemptions

What is a Tennessee sales tax exemption certificate?

A Tennessee sales tax exemption certificate is a document that allows eligible purchasers to buy certain goods or services tax-free, provided they qualify for exemption under state laws.

What is exempt from Tennessee sales tax?

Exempt items include prescription drugs, medical devices, certain agricultural products, and goods purchased by qualifying nonprofits or government entities. Learn what's exempt from Tennessee sales tax.

Is SaaS taxable in Tennessee?

Yes, SaaS (Software as a Service) is taxable in Tennessee, as it is considered taxable tangible personal property. Learn about sales tax on electronics in Tennessee.

Is there a sales tax on clothes in Tennessee?

Yes, clothing is subject to Tennessee sales tax at the state and local tax rates. Navigate Tennessee sales tax on clothing.

What’s the Tennessee sales tax are on clothing?

Clothing is taxed at the state rate of 7%, plus any applicable local tax, which typically ranges from 1.5% to 2.75%.

How to apply for sales tax exemption in Tennessee?

Eligible businesses or organizations can apply for sales tax exemption by submitting an application and required documentation through the Tennessee Department of Revenue.

Who is exempt from TN excise tax?

Exempt entities include nonprofit organizations, certain governmental agencies, and businesses engaging exclusively in agricultural production.

What items are exempt from Tennessee sales tax?

Exempt items include prescription drugs, some medical equipment, food sold under WIC, and certain agricultural products like seeds and fertilizers.

What's the Tennessee Sales Tax Registration Process?

Registering for a sales tax permit in Tennessee is essential for businesses engaged in taxable sales. Below are the steps to complete the registration process in compliance with Tennessee’s tax policy.

1. Determine Your Obligation: Confirm if your business has a sales tax nexus in Tennessee, such as a physical presence or economic nexus (over $100,000 in annual sales to Tennessee customers).

2. Visit the Tennessee Department of Revenue Website: Navigate to the official Tennessee Taxpayer Access Point (TNTAP) portal.

3. Create a TNTAP Account: Register for an account by providing your business name, federal EIN (or SSN for sole proprietors), and contact details.

4. Complete the Sales Tax Registration Application: Fill out the application form, including business type, physical location, estimated sales volume, and type of products or services sold.

5. Submit Required Documentation: Provide supporting documents such as proof of business registration and identification as part of the application process.

6. Pay the Registration Fee (if applicable): Tennessee may charge a small fee for certain business registrations, depending on the business structure.

7. Receive Your Sales Tax Permit: Once approved, you’ll receive your Tennessee sales tax permit, authorizing you to collect and remit sales tax.

8. Start Collecting Sales Tax: Begin collecting sales tax on taxable transactions at the appropriate combined state and local rates.

9. File Sales Tax Returns: File and remit sales tax through the TNTAP portal according to your assigned filing frequency (monthly, quarterly, or annually).

10. Maintain Records: Keep accurate records of taxable and exempt sales, along with filed returns, for compliance with Tennessee Department of Revenue requirements.

Tennessee Sales Tax Filing

Tennessee sales tax filing requires businesses to report and remit collected sales tax to the Tennessee Department of Revenue based on their assigned filing frequency (monthly, quarterly, or annually). Businesses must calculate taxable sales, account for exemptions, and ensure accurate reporting when filing returns.

Filing is done through the Tennessee Taxpayer Access Point (TNTAP) portal, where payments can also be submitted. Proper record-keeping and timely submissions are essential to avoid penalties.

What are the Tennessee sales tax filing requirements?

Businesses must report all taxable and exempt sales, collect the correct amount of sales tax, and file returns through the Tennessee Taxpayer Access Point (TNTAP) by their assigned filing frequency.

How to file sales tax in Tennessee?

File sales tax returns online through the TNTAP portal by entering sales data, exemptions, and payments, ensuring submission by the due date.

How often do you have to file sales tax in Tennessee?

Filing frequency (monthly, quarterly, or annually) is assigned by the Tennessee Department of Revenue based on the business's sales volume.

How to change sales tax filing status in Tennessee?

To change your filing status, contact the Tennessee Department of Revenue through the TNTAP portal or by phone and request a status update based on your sales volume or other changes.

How much is late filing fee for Tennessee sales tax?

The late filing penalty is 5% of the tax due per month, up to a maximum of 25%, plus interest on the unpaid balance.

Tennessee Sales Tax Due Date​

Filing Frequency	Due Date
Monthly	Every 20th day of the following month(Ex. Due date for January is February 20)
Quarterly	Every 20th day of the month following the quarter’s end. (Ex. Due date for Q1 (January 1 – March 31) is April 20)
Annually	January 20th of the following year

What is the tax deadline for Tennessee?

Tennessee sales tax is generally due on the 20th day of the month following the end of the reporting period unless it falls on a weekend or holiday, in which case it’s due the next business day.

What is the penalty for filing sales taxes late in Tennessee?

The penalty for late filing is 5% of the tax due per month, up to a maximum of 25%, plus interest on the unpaid tax balance.

Tennessee Sales Tax Revenue Service

For any concerns about Tennessee sales tax registration, filing or general inquiries, you can reach out to them through the following:

• Phone:  (615) 253-0600
• Toll-free: (800) 342-1003
• Website: https://www.tn.gov/revenue/

With this guide, managing Tennessee sales tax is easier than ever. However, if you want to make compliance stress-free and concentrate on growing your business with confidence and peace of mind, then let Kintsugi handle the details. Sign up or book a demo now.