Tennessee Sales Tax Rate 2026: 7% State, 9.61% Avg. Combined
Tennessee’s state sales tax rate is 7%. Cities, counties and special districts add their own rates on top, so the total depends on where the order is delivered. The average combined state and local rate is 9.61%. Local rates are capped at 2.75%, so the combined rate tops out at 9.75%.
| Tennessee sales tax (2026) | Rate |
|---|---|
| State rate | 7% |
| Average local rate | 2.61% |
| Average combined rate | 9.61% |
Rates as of July 1, 2026, from the Tax Foundation. The exact rate on an order depends on the delivery address. Look up the exact rate for any Tennessee ZIP code with our sales tax calculator.
Tennessee has a 7% state rate and regularly ranks as having the highest average combined sales tax rate in the US when local rates are included (approximately 9.5% average). Tennessee taxes SaaS and digital goods. Tennessee is not an SST member, requiring direct registration with the Department of Revenue.
Quick Reference
Section titled “Quick Reference”| Criterion | Detail |
|---|---|
| State Rate | 7% |
| Economic Nexus Threshold | $100,000 gross sales (rolling 12 months) |
| Transaction Threshold | None |
| Digital Goods / SaaS | Taxable |
| Typical Filing Frequency | Monthly |
| SST Member | No |
| Registration Portal | tntap.tn.gov |
Economic Nexus
Section titled “Economic Nexus”For informational purposes only · Not legal or tax advice · Consult a licensed tax professional · Rules as of 2026
Tennessee’s economic nexus threshold is $100,000 in gross sales into Tennessee in the current or prior 12-month period. Once exceeded, registration and collection are required.
Tennessee was one of the later states to formally adopt an economic nexus rule aligned with Wayfair. Marketplace-facilitated sales count toward the threshold. There is no transaction count alternative threshold.
Tax Rate and Product Taxability
Section titled “Tax Rate and Product Taxability”Tennessee sales tax calculator
Every rate that applies at a US ZIP code, worked out on your order.
Sales tax · Tennessee 37203
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Collecting sales tax in Tennessee and beyond?
GoodVat tracks your economic nexus in every state, registers you, charges the right rate on every order and files your returns.
Calculation only, not legal or tax advice. Verify with the state Department of Revenue before you file. State averages: Tax Foundation, July 1, 2026.
Tennessee’s state rate is 7%. Local jurisdictions add substantially:
- State: 7%
- County: typically 2.25%–2.75%
- Combined average statewide: approximately 9.547% — the highest average combined rate of any US state
- Combined in Nashville (Davidson): 9.25%
- Combined in Memphis (Shelby): 9.75%
- Combined in Knoxville (Knox): 9.25%
Tennessee uses destination-based sourcing for remote sellers.
Product Categories
Section titled “Product Categories”Taxable: Tangible personal property, digital goods (including SaaS), most retail goods.
Exempt: Prescription drugs, most groceries (food for home consumption is subject to a reduced 4% state rate — see below), qualifying agricultural inputs.
Grocery reduced rate: Tennessee applies a reduced 4% state rate on food and food ingredients for home consumption (vs. the standard 7%). Local rates still apply at full rate. This means groceries in Tennessee run approximately 6.25%–7% depending on county, not the full 9%+ rate.
Digital Goods and SaaS
Section titled “Digital Goods and SaaS”Tennessee taxes SaaS and digital goods under its sales tax framework:
- SaaS — taxable; Tennessee’s Department of Revenue treats remotely accessed software as a taxable “specified digital product” or taxable service
- Downloaded software — taxable
- Digital content (music, ebooks, streaming video and audio) — taxable
- Online subscriptions for digital products — taxable
Tennessee expanded its digital goods taxability framework and has applied sales tax to a wide range of digital transactions. SaaS sellers crossing $100,000 in Tennessee revenue have a clear obligation.
Registration
Section titled “Registration”Tennessee is not an SST member. Register directly with the Department of Revenue.
- Go to Tennessee Taxpayer Access Point (TNTAP): tntap.tn.gov
- Create an account and register for a Sales and Use Tax Account
- Provide EIN and business details
- You will receive a Tennessee Certificate of Registration
Registration is free.
Foreign Sellers
Section titled “Foreign Sellers”Tennessee accepts foreign business registrations. A US EIN is required. Tennessee does not require a registered agent for remote seller registration.
Filing Frequency and Deadlines
Section titled “Filing Frequency and Deadlines”| Annual Tax Liability | Filing Frequency |
|---|---|
| Less than $1,200 | Annual |
| $1,200–$12,000 | Quarterly |
| More than $12,000 | Monthly |
Monthly due dates: Returns are due by the 20th of the following month.
Returns are filed through TNTAP.
Compliance Notes
Section titled “Compliance Notes”Highest average combined rate: Tennessee’s 9.5%+ average combined rate is the highest in the US. High-volume Tennessee sales generate significant tax liability. Ensure your rate calculation engine is configured with current destination-based county rates.
Grocery reduced rate: The 4% state rate on food (vs. 7% standard) requires product-level classification for food sellers. Local rates apply at full rate to food as well.
Not SST: Tennessee is not an SST member. Multi-state SST registration does not cover Tennessee.
Digital sellers: Tennessee taxes SaaS. Register once you cross $100,000.
Amazon FBA: Amazon operates in Tennessee. FBA inventory creates physical nexus immediately.
Tennessee Sales Tax FAQ
Section titled “Tennessee Sales Tax FAQ”What is the sales tax rate in Tennessee?
Section titled “What is the sales tax rate in Tennessee?”Tennessee’s state sales tax rate is 7%. Local taxes are added on top, and the average combined state and local rate is 9.61% (Tax Foundation, July 2026). The exact rate depends on the delivery address. Local rates are capped at 2.75%, so the combined rate tops out at 9.75%.
What is the Tennessee economic nexus threshold?
Section titled “What is the Tennessee economic nexus threshold?”Remote sellers must register and collect Tennessee sales tax once they make more than $100,000 in gross sales into the state (rolling 12 months). There is no separate transaction-count threshold.
Is SaaS taxable in Tennessee?
Section titled “Is SaaS taxable in Tennessee?”Yes. Tennessee generally taxes SaaS and digital goods. See the Digital Goods and SaaS section above for the details.
How often do you file sales tax in Tennessee?
Section titled “How often do you file sales tax in Tennessee?”Most sellers file monthly. Tennessee assigns your filing frequency when you register, based on how much tax you collect, so lower-volume sellers may file less often.