The combined sales tax rate in Collierville, Tennessee is 9.75% on most retail purchases. That total stacks three layers: a 7% state tax, a 2.25% Shelby County tax, and a 0.50% town of Collierville tax. Groceries, large single-item purchases, and prescription drugs follow different rules that can lower what you actually pay at the register.
How the 9.75% Breaks Down
Tennessee levies a 7% statewide tax on most tangible goods sold at retail.1Justia. Tennessee Code 67-6-202 – Property Sold at Retail State law lets counties and cities add a local option tax, capped at 2.75% combined.2Justia. Tennessee Code 67-6-702 – Tax Authorized Collierville hits that ceiling. Shelby County contributes 2.25% and the town adds 0.50%, for a local total of 2.75%.
Merchants collect the full 9.75% at checkout and remit it to the Tennessee Department of Revenue, which then returns the local share to the county and town.3Tennessee Department of Revenue. Local Sales Tax
Groceries Are Taxed Lower
Food and food ingredients bought for home consumption are taxed at a reduced state rate of 4% rather than 7%.4Tennessee Department of Revenue. SUT-53 – Food and Food Ingredients – Definition and Tax Rate Add the 2.75% local rate and you pay 6.75% on groceries in Collierville. For a weekly grocery run, that three-point gap matters.
Not everything in a grocery store qualifies. Prepared food (restaurant meals, hot deli items, anything sold with utensils), candy, dietary supplements, alcoholic beverages, and tobacco all stay at the full 9.75%. The usual test for deli counters and ready-to-eat items is whether they are sold heated or come with utensils.
A bill in the 114th General Assembly would have eliminated the 4% state portion on food, but as of 2026 the state grocery rate is still 4%.5Tennessee Department of Revenue. Due Dates and Tax Rates
Big-Ticket Items and the Single Article Cap
Expensive single items like cars, boats, and major appliances carry a lower effective tax rate because of Tennessee’s single article rules. The local 2.75% tax applies only to the first $1,600 of the item’s price.2Justia. Tennessee Code 67-6-702 – Tax Authorized A separate state single article tax of 2.75% then applies to the portion between $1,600 and $3,200. Above $3,200, only the base 7% state tax applies.6Tennessee Department of Revenue. Single Article Special Tax Rates
On a $30,000 vehicle, the math works out like this:
- First $1,600 taxed at 9.75% (7% state + 2.75% local) = $156.00
- $1,600.01 to $3,200 taxed at 9.75% (7% state + 2.75% state single article) = $156.00
- $3,200.01 to $30,000 taxed at 7% state only = $1,876.00
- Total: $2,188.00, an effective rate of about 7.29%
The cap applies per item. Two items at $2,000 each get the cap separately.
What’s Exempt
A few categories are fully exempt from both state and local sales tax:
- Prescription drugs, including over-the-counter drugs when a physician prescribes them, plus insulin and medical oxygen prescribed for human use.7Justia. Tennessee Code 67-6-320 – Prescription Drugs
- Gasoline, which is taxed under a separate excise system rather than retail sales tax.
- School meals and textbooks, under specific statutory provisions.
Over-the-counter pain relievers, cold medicine, and vitamins you buy without a prescription are generally taxable at the full 9.75%. Grooming and hygiene products stay taxable even when prescribed.7Justia. Tennessee Code 67-6-320 – Prescription Drugs
The Annual Sales Tax Holiday
Tennessee runs a mandatory sales tax holiday every year on the last full weekend in July, from 12:01 a.m. Friday through 11:59 p.m. Sunday. In 2026, that falls on July 24 through July 26. During the holiday, qualifying items are completely exempt from both state and local tax, so the rate drops from 9.75% to zero.
Qualifying items and price limits:
- Clothing and apparel, $100 or less per item
- School supplies and art supplies, $100 or less per item
- Computers, laptops, and tablets, $1,500 or less (software bought separately does not qualify)
The limit is per item, not per transaction, so you can buy several qualifying items in one trip. Items bought for use in a trade or business, and rented items, do not qualify. Retailers cannot opt out.8Tennessee Department of Revenue. Annual Sales Tax Holiday
Online and Out-of-State Purchases
When you buy from a seller that does not collect Tennessee sales tax, you owe use tax on the purchase. In Collierville, the use tax rate matches the sales tax rate: 9.75%.3Tennessee Department of Revenue. Local Sales Tax
In practice, most online shopping is already covered at checkout. Since October 2020, Tennessee has required marketplace facilitators like Amazon, eBay, and Etsy to collect and remit sales tax for their third-party sellers once the facilitator’s Tennessee sales exceed $100,000 over the prior 12 months.9Tennessee Department of Revenue. SUT-4 – Nexus – Overview Every major platform clears that threshold. Remote sellers who sell directly to Tennessee customers face the same $100,000 nexus threshold and, once past it, must charge the local rate for the buyer’s address, which for a Collierville delivery is 9.75% on standard taxable goods.
Use tax mainly comes up now with smaller vendors, private-party sales, and items you buy while traveling out of state. Unpaid use tax is reported directly to the Department of Revenue.