Tennessee sales tax rates vary by county because every purchase carries a flat 7% state tax plus a local tax that the county or city sets, capped at 2.75%. Most Tennessee counties charge the full local rate, which puts the combined sales tax at 9.75% in the majority of the state. A handful of counties sit at 9.25% or 9.5%, and groceries, big-ticket items, and the annual back-to-school weekend follow different rules.
The 7% State Rate Applies Everywhere
Every retail sale of tangible personal property in Tennessee starts with a 7% state tax under T.C.A. § 67-6-202.1Justia. Tennessee Code 67-6-202 – Property Sold at Retail That rate is identical in all 95 counties. A television in Knoxville and a pair of boots in Memphis both carry the same 7% state portion. Sellers collect it at the register and remit it to the Tennessee Department of Revenue.
Local Rates Range From 2.25% to 2.75%
On top of the state’s 7%, every county and incorporated city can levy its own local option sales tax. T.C.A. § 67-6-702 caps this local addition at 2.75%, and the rate must be set in quarter-percent increments.2Justia. Tennessee Code 67-6-702 – Tax Authorized – Rates – Termination of Services Tax Most counties have voted to impose the full 2.75%, producing a combined rate of 9.75%. A few jurisdictions sit at 2.25% or 2.5%, bringing their combined rates to 9.25% or 9.5%.3Tennessee Department of Revenue. Local Sales Tax
No local rate takes effect until voters approve it in a referendum. When a sale happens inside city limits, both the county rate and any municipal rate can apply, but the combined local portion still cannot exceed 2.75%. Businesses remit one payment to the Department of Revenue, which then distributes the local share back to the county or city where the sale occurred.
Local rate changes typically take effect at the start of a calendar quarter, so the rate map is a moving target. The Department of Revenue publishes an interactive map showing the current local rate for every county and city.4Tennessee Department of Revenue. Local Sales Tax Rates Map For an exact rate at a specific location, the department also offers an address-level lookup, which matters most near city-county borders where the applicable rate can shift within a few blocks.3Tennessee Department of Revenue. Local Sales Tax The most recent boundary and rate update covers rates effective April 1, 2026.5Tennessee Department of Revenue. Streamlined Sales Tax
Groceries Are Taxed at a Lower State Rate
Tennessee taxes groceries at a reduced state rate of 4% instead of 7%. T.C.A. § 67-6-228 defines qualifying items as food and food ingredients for human consumption.6Justia. Tennessee Code 67-6-228 – Food Retail Sales Tax Your county’s local tax still applies on top, so in a county with a 2.75% local rate, groceries come out to 6.75% combined.
Not everything sold at a grocery store qualifies. Prepared food, candy, dietary supplements, and alcoholic beverages are taxed at the full 7% state rate plus local taxes.7Tennessee Department of Revenue. SUT-13 – Sales and Use Tax Rates – Overview The Department of Revenue treats food as “prepared” if it is sold heated, contains two or more ingredients mixed by the seller for sale as a single item, or comes with utensils like plates, forks, or napkins.8Tennessee Department of Revenue. SUT-54 – Prepared Food – Definition and Tax Rate A rotisserie chicken from the hot case is prepared food at the full rate. A raw chicken from the meat counter is a grocery item at 6.75% in a 2.75% county.
Prescription drugs are fully exempt from Tennessee sales tax, and over-the-counter medications qualify for the exemption when purchased with a prescription.9Tennessee Department of Revenue. SUT-125 – Sales of Prescription Drugs
Local Tax Is Capped on Expensive Single Items
Your county’s local rate applies only to the first $1,600 of any single piece of tangible personal property. T.C.A. § 67-6-702 sets that cap.2Justia. Tennessee Code 67-6-702 – Tax Authorized – Rates – Termination of Services Tax For vehicles, appliances, and other big-ticket purchases, the math is friendlier than a flat combined rate would suggest.
Three tiers apply to a single item:
- First $1,600: 7% state tax plus your local rate (up to 2.75%)
- $1,600 to $3,200: 7% state tax plus an additional 2.75% state-only tax, with no local tax
- Above $3,200: only the 7% state tax
The additional 2.75% state tax on the middle slice is written into T.C.A. § 67-6-202 and goes entirely to the state.1Justia. Tennessee Code 67-6-202 – Property Sold at Retail On a $30,000 vehicle in a 2.75% county, local tax tops out at $44 (2.75% of $1,600), the extra state tax adds another $44 (2.75% of the next $1,600), and the standard 7% applies to the full $30,000. The total is roughly $2,188 rather than the $2,925 a flat 9.75% would produce.
The cap works per item, not per invoice. Buy three appliances on one receipt and each gets its own $1,600 local threshold.10Tennessee Department of Revenue. Single Article and Special Tax Rates For motor vehicles and boats, dealer-installed accessories count toward the item’s price when calculating the cap.
A Few Counties Still Use Older Per-Item Caps
A small number of counties operate under legacy local caps of $5 or $7.50 per item rather than the $1,600 threshold. Those older limits stay in effect unless the county legislative body formally removes them by resolution passed at two or more consecutive public meetings with published notice.2Justia. Tennessee Code 67-6-702 – Tax Authorized – Rates – Termination of Services Tax Where they still apply, the local tax on any single item is capped at $5 or $7.50 no matter the price.
The Annual Sales Tax Holiday
Once a year, on the last weekend of July, Tennessee suspends both state and local sales tax on qualifying back-to-school purchases. The 2026 holiday runs Friday, July 24 through Sunday, July 26. T.C.A. § 67-6-393 sets the price thresholds:11Justia. Tennessee Code 67-6-393 – Exemption for Sales Tax Holiday
- Clothing: $100 or less per item
- School supplies and art supplies: $100 or less per item
- Computers, laptops, and tablets: $1,500 or less per item
Because both state and local taxes are waived, the savings equal the full combined rate in your county. A $90 pair of shoes in a 9.75% county saves you $8.78. Items that do not qualify include video game consoles, computer software, clothing accessories, protective equipment, sporting goods, and anything bought for use in a trade or business.