# Tennessee Sales Tax Guide (2026)

Canonical: https://trykintsugi.com/sales-tax-guides/usa/tennessee
Published: September 22, 2026

Tennessee's 7% state rate reaches 9.75% in Nashville, and SaaS is taxable. Economic nexus begins at $100,000.

- **SaaS:** Taxable
- **Clothing:** Taxable
- **Groceries:** Taxable
- **Digital Goods:** Taxable

- **Effective date::** 
- **Scheduled change::** 

## Key Takeaways

Tennessee's state sales tax rate is 7%, plus local option taxes up to 2.75%, for combined rates near 9.75% [1]. You have economic nexus once sales into Tennessee exceed $100,000 over the preceding 12 months, a threshold lowered from $500,000 on October 1, 2020, with no transaction-count trigger [2]. Tennessee taxes SaaS and remotely accessed software and taxes specified digital products; groceries are taxed at a reduced 4% state rate [3][5][6]. You can dispute an assessment through an informal conference and then file suit in Chancery Court within 90 days [8].

## Taxability Snapshot

## Sales Tax Rates

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%.

| Component | Rate | Scope |
| --- | --- | --- |
| State | 7.00% | Statewide |
| Local | up to 2.75% | Varies by county/city |
| Combined | up to 9.75% | Varies by location |

Combined rates in major Tennessee cities (2026):

| City | Combined rate |
| --- | --- |
| Nashville | 9.75% |
| Memphis | 9.75% |
| Clarksville | 9.50% |
| Knoxville | 9.25% |
| Chattanooga | 9.25% |

To find the combined rate for a specific address, use our [US sales tax calculator](/us-sales-tax-calculator).

## Registration or Nexus Threshold

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.

## Marketplace Facilitator Law

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]

## Filing Frequency & Deadlines

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.

#### Exemptions

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.

## Resale & Exemption Certificates

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].

## Penalties

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.

## Audits & Appeals

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].

## Sources

- [1] [Tennessee DOR — Sales and Use Tax Rates (7% state, local)](https://revenue.support.tn.gov/hc/en-us/articles/360058139672-SUT-13-Sales-and-Use-Tax-Rates-Overview)

- [2] [Tennessee DOR — Out-of-State Dealer Nexus (economic nexus)](https://revenue.support.tn.gov/hc/en-us/articles/360058138852-SUT-5-Activities-that-Give-Out-of-State-Dealers-Nexus-in-Tennessee)

- [3] [Tennessee DOR — Remotely Accessed Software (SaaS taxable)](https://revenue.support.tn.gov/hc/en-us/articles/360057266092-RAS-1-Remotely-Accessed-Software-Overview)

- [5] [Tennessee DOR — Food and Food Ingredients (reduced 4% rate)](https://revenue.support.tn.gov/hc/en-us/articles/360058680751--SUT-53-Food-and-Food-Ingredients-Definition-and-Tax-Rate)

- [6] [Tennessee DOR — Specified Digital Products (taxable)](https://revenue.support.tn.gov/hc/en-us/articles/360058688471-SUT-65-Specified-Digital-Products)

- [7] [Tennessee DOR — Sale for Resale (Resale Certificate)](https://revenue.support.tn.gov/hc/en-us/articles/360058174992-SUT-31-Sale-for-Resale-Resale-Certificate-Overview)

- [8] [Tennessee DOR — Informal Conference and Appeals](https://revenue.support.tn.gov/hc/en-us/articles/360057399392-IC-1-Informal-Conference-Overview)

- [9] [Tennessee DOR — 2026 Sales Tax Holiday](https://www.tn.gov/revenue/news/2026/7/17/tennessee-s-sales-tax-holiday-continues-two-decades-of-savings.html)

- [10] [Tennessee DOR — Registering for a Sales and Use Tax Account (TNTAP)](https://revenue.support.tn.gov/hc/en-us/articles/360058139252-SUT-10-Sales-and-Use-Tax-Account-Registering-for-an-Account)

- [11] [Tennessee Department of Revenue — Out-of-State Dealers & Marketplace Facilitators](https://www.tn.gov/revenue/taxes/sales-and-use-tax/out-of-state-dealers-marketplace-facilitators.html)

Verified July 2026 against Tennessee Department of Revenue published guidance.

## Frequently Asked Questions

### What is the Tennessee sales tax rate in 2026?

7% state — among the highest in the US — plus up to 2.75% local, for combined rates as high as 9.75% in Nashville.

### What is Tennessee's economic nexus threshold?

$100,000 in sales into Tennessee over the preceding 12 months. There is no transaction-count trigger.

### Is SaaS taxable in Tennessee?

Yes. SaaS is fully taxable in Tennessee, including remotely accessed software.

### Are groceries taxed in Tennessee?

Yes, at a reduced 4% state rate plus local tax, rather than the full rate.

### When are Tennessee sales tax returns due?

The 20th of the month following the reporting period, filed through TNTAP.

### What is the penalty for late Tennessee sales tax?

5% of the tax due per 30-day period, up to 25% (minimum $15), plus interest.

## Related Reading

- [Tennessee Sales Tax in Greene County on Food Products: A Breakdown](/blog/tennessee-sales-tax-in-greene-county-on-food-products)

- [Understanding Tennessee Sales Tax on Clothing: A Guide for Businesses](/blog/tennessee-sales-tax-on-clothing)

- [What Is Exempt from Tennessee Sales Tax? A 2026 Guide for Businesses](/blog/what-is-exempt-from-tennessee-sales-tax)

## US Sales Tax Calculator