The Memphis sales tax rate is 9.75% on most purchases. That’s a 7% Tennessee state tax plus 2.75% in local tax shared between Shelby County and the city, and it’s the maximum combined rate allowed under state law. Groceries, prescriptions, and expensive single items follow different rules that can lower what you actually pay.
How the 9.75% Breaks Down
Tennessee charges a statewide 7% sales tax on most retail sales of tangible personal property and taxable services.1Tennessee Department of Revenue. SUT-13 – Sales and Use Tax Rates – Overview Local jurisdictions add their own tax on top, and Tennessee caps that local portion at 2.75%. Memphis sits at that ceiling, which produces the combined 9.75% rate.2Tennessee General Assembly. Fiscal Memorandum HB 308 – SB 337
Both pieces are collected together at checkout. You usually won’t see them split out on your receipt. The retailer sends everything to the Tennessee Department of Revenue, which routes the local share back to Shelby County and Memphis.
What the 9.75% Applies To
Tennessee taxes almost any physical item you buy: clothing, electronics, furniture, vehicles, household goods, and the like.3Justia. Tennessee Code 67-6-201 – Taxable Privilege Declared Digital products are treated the same way. A downloaded movie, an audiobook, or a software purchase triggers the full 9.75%.
Repair labor often surprises people. Tennessee taxes all charges for repairing tangible personal property, including labor, parts, service-call fees, mileage, and flat-rate billing.4Legal Information Institute. Tenn. Comp. R. and Regs. 1320-05-01-.54 – Repair Services That holds even if no new parts are used, or if you supply the parts yourself. Alterations, refinishing, and resizing count as repairs too. Work on buildings, plumbing, wiring, or anything permanently attached to real property is not taxable as a repair service, and a service call where no actual repair happens isn’t either.
Entertainment and recreation get taxed broadly. Tickets to sporting events and concerts are taxable, as are seat licenses, skybox rentals, and luxury suites. So are dues at country clubs, golf courses, and swim clubs, and rental charges for things like golf carts or bowling shoes.5Tennessee Department of Revenue. SUT-7 – Amusement Tax – Overview Health clubs and physical fitness facilities are specifically excluded, so a standard gym membership isn’t subject to this tax.
Groceries: 6.75% Instead of 9.75%
Unprepared food and food ingredients are taxed at a reduced state rate of 4% instead of 7%.6Tennessee Department of Revenue. Tennessee Sales and Use Tax – Due Dates and Tax Rates The 2.75% local portion still applies in full, so a Memphis grocery bill carries a combined rate of 6.75%.
Prepared food, candy, dietary supplements, and alcoholic beverages don’t qualify and are taxed at the full 9.75%.7FindLaw. Tennessee Code Title 67 Section 67-6-228 The line between “grocery” and “prepared food” matters in the same store: a rotisserie chicken from the deli counter is prepared food at 9.75%, while raw chicken from the meat case is 6.75%.
Prescriptions and Over-the-Counter Medicine
Prescription medications and certain healthcare equipment are exempt from both state and local sales tax.8Tennessee Department of Revenue. SUT-125 – Sales of Prescription Drugs Over-the-counter medications generally don’t qualify and are taxed at the standard 9.75%.
The Single Article Cap on Big-Ticket Items
Expensive single purchases get a built-in break. The 2.75% local tax applies only to the first $1,600 of any single item’s price. A separate state single article tax of 2.75% then applies to the portion of the price between $1,600 and $3,200. Above $3,200, only the base 7% state rate applies.9Tennessee Department of Revenue. Single Article and Special Tax Rates
On a $5,000 piece of furniture bought in Memphis, that works out to:
- 7% state tax on the full $5,000: $350
- 2.75% local tax on the first $1,600: $44
- 2.75% state single article tax on the next $1,600: $44
- Total tax: $438, or an effective rate of about 8.76%
A “single article” means one item sold as an independent unit. A cart full of $50 items on a single receipt doesn’t qualify, because each $50 item is its own article. The cap also doesn’t apply to custom software, service contracts, warranties, digital products, or amusement charges. Those are taxed at the full 9.75% on their entire price.9Tennessee Department of Revenue. Single Article and Special Tax Rates
The Annual Sales Tax Holiday
Tennessee holds a sales tax holiday every year on the last full weekend in July. For 2026, it runs Friday, July 24 through Sunday, July 26. During that weekend, both state and local sales tax are waived on qualifying items:
- Clothing priced at $100 or less per item
- School supplies and art supplies priced at $100 or less per item
- Computers, laptops, and tablets priced at $1,500 or less (software is excluded)
The limits apply per item, not per transaction, so you can buy several qualifying items in one trip. Items bought for business use don’t qualify, and rentals are excluded.
Online and Out-of-State Purchases
If you buy something from a seller who doesn’t collect Tennessee sales tax, you owe use tax at the same combined rate you’d pay in a Memphis store.10Tennessee Department of Revenue. Sales and Use Tax Most large online retailers now collect Tennessee tax automatically, but smaller vendors, private sellers, and some out-of-state sites still don’t.
Individuals who aren’t registered for sales tax can file a consumer use tax return through TNTAP, the Tennessee Taxpayer Access Point.10Tennessee Department of Revenue. Sales and Use Tax It’s one of the most commonly ignored tax obligations in the state, but it’s legally required.