The Tennessee sales tax starts at a 7% state rate on most retail purchases, with local governments adding up to 2.75% on top. The twist comes on expensive items: the local portion only applies to the first $1,600 of a single item, and a separate state “single article” tax of 2.75% covers the slice from $1,600.01 to $3,200. Anything above $3,200 is taxed only at the base 7%. Groceries get a lower state rate of 4%.
The 7% State Rate
Tennessee’s base sales tax is 7%, and it applies to nearly all tangible goods and many services sold at retail.1Justia Law. Tennessee Code 67-6-202 – Property Sold at Retail This layer has no cap. Whether you’re buying a $50 pair of shoes or a $50,000 truck, the 7% applies to the full price. Sellers collect it at the register and remit it to the Tennessee Department of Revenue.
What you actually pay on a receipt is almost always higher than 7%, because every county and most cities add their own tax on top. The combined rate depends on where the sale happens.
Groceries at 4%
Food and food ingredients sold for home consumption are taxed at a reduced state rate of 4% instead of 7%.2Tennessee Department of Revenue. Due Dates and Tax Rates Local option taxes still apply on top, so the total grocery rate in most counties lands between 6% and 6.75%.
Prepared food, candy, and dietary supplements don’t qualify for the reduced rate. Those are taxed at the full 7% state rate plus local tax. The line between “food for home consumption” and “prepared food” is what decides which rate applies at checkout.
Local Option Sales Tax
Every county and incorporated city in Tennessee can impose its own sales tax on top of the state rate. State law caps local rates at 2.75%, and most jurisdictions have adopted the maximum.3Justia Law. Tennessee Code 67-6-702 – Tax Authorized – Rates – Termination of Services Tax The revenue typically funds local schools and municipal services.
The detail that matters for anything expensive: local option tax only applies to the first $1,600 of a single item’s price.3Justia Law. Tennessee Code 67-6-702 – Tax Authorized – Rates – Termination of Services Tax Buy a $1,600 appliance and local tax hits the full amount. Buy a $10,000 appliance and local tax still only reaches $1,600 of it. At the 2.75% maximum, local tax on any one item tops out at $44, regardless of how expensive the item is.
The Single Article Tax
A separate state-level tax picks up where local authority stops. The “single article tax” is an additional 2.75% that applies only to the portion of a single item’s price between $1,600.01 and $3,200.1Justia Law. Tennessee Code 67-6-202 – Property Sold at Retail No county or city can levy any tax on that slice; it belongs exclusively to the state.4Tennessee Department of Revenue. Single Article Special Tax Rates
Any amount above $3,200 escapes both the local option tax and the single article tax. Only the 7% base rate reaches that high. As a result, the combined effective rate falls as prices rise. A $1,000 purchase in a 2.75% local jurisdiction is taxed at 9.75% combined. A $50,000 purchase blends down closer to 7.2%.
What Counts as a Single Article
The $1,600 and $3,200 thresholds only work if you can identify what one “single article” is. The Department of Revenue defines it as one item of tangible personal property that common understanding treats as a separate, independent unit, apart from any accessories or extra parts.5Tennessee Department of Revenue. SUT-6 – Single Article Tax – Overview and Application A refrigerator is one article. A boat is one article. A set of four tires sold together is typically four separate articles, not one.
What gets folded into that article’s price changes the tax bill. The Department of Revenue includes these in the “sales price” used for the single article calculation:6Tennessee Department of Revenue. Single Article Tax in Tennessee
- Delivery, shipping, freight, and installation charges billed in connection with the sale.
- Any labor or processing necessary to complete the sale.
- Dealer fees, document fees, and similar processing charges.
- Interest and taxes imposed on the seller.
Items that aren’t physically part of the article are excluded. Ski ropes and life jackets sold alongside a boat, for example, are separate articles and should be itemized independently on the invoice.6Tennessee Department of Revenue. Single Article Tax in Tennessee How the seller writes the invoice directly affects what you owe. Accessories listed as separate line items get their own single-article treatment, which usually means the full state and local rate applies to each one.
Tax on a $25,000 Purchase
Here is how the three layers stack on a $25,000 item in a county with a 2.75% local rate:
- Base state tax (7% on the full price): $25,000 × 7% = $1,750.
- Local option tax (2.75% on the first $1,600): $1,600 × 2.75% = $44.
- Single article tax (2.75% on $1,600.01 to $3,200): $1,600 × 2.75% = $44.
Total tax: $1,838.5Tennessee Department of Revenue. SUT-6 – Single Article Tax – Overview and Application The entire $21,800 above $3,200 is only subject to the 7% base rate. The local government’s share tops out at $44 regardless of how expensive the item is.
For a $3,200 item, the same formula produces $224 in base state tax, $44 in local tax, and $44 in single article tax, totaling $312. For anything under $1,600, you simply add the 7% state rate to whatever your county charges. If your county’s local rate is below 2.75%, the local tax portion drops accordingly, but the single article tax stays fixed at 2.75% statewide.4Tennessee Department of Revenue. Single Article Special Tax Rates
Exemptions and the Annual Sales Tax Holiday
Several categories of goods are exempt from Tennessee sales tax entirely. The most significant include agricultural supplies purchased by qualified farmers (equipment, seeds, fertilizer, livestock feed), industrial machinery used in manufacturing, and freight trailers operated by common carriers.7Tennessee Department of Revenue. Sales Tax Exemptions Prescription drugs are also exempt. Most exemptions require the buyer to hold a valid exemption certificate on file with the seller.
Tennessee also holds an annual sales tax holiday, typically in late July. For 2026, the holiday runs July 24 through July 26. During that weekend, these purchases are exempt from both state and local sales tax:
- Clothing priced at $100 or less per item.
- School supplies priced at $100 or less.
- Computers, laptops, and tablets priced at $1,500 or less.
Items purchased for business use don’t qualify. The holiday is mandatory statewide, and local jurisdictions cannot opt out.
Online and Out-of-State Purchases
If you buy something from an out-of-state seller who doesn’t collect Tennessee sales tax, you owe a “use tax” at the same combined rate you would have paid in-state. This covers online purchases, catalog orders, and goods you physically bring back from another state.8Tennessee Department of Revenue. Consumer Use Tax The state and local rates apply the same way they would at a Tennessee register, including the $1,600 and $3,200 single-article thresholds.
Since July 2024, Tennessee’s use tax also covers certain services performed out of state when the serviced property is shipped back to a Tennessee customer. That includes repair services, dry cleaning, and software installation performed at an out-of-state location.8Tennessee Department of Revenue. Consumer Use Tax In practice, large online platforms like Amazon, eBay, and Etsy now collect Tennessee sales tax as marketplace facilitators, so most consumers already see the correct Tennessee tax applied automatically at checkout. The use-tax obligation mainly surfaces when a smaller out-of-state seller sells to you directly and doesn’t collect.