How Tennessee Sales Tax Works
Tennessee's state government imposes a 7.00% sales tax on most retail purchases. Counties, cities, and special districts can layer additional local sales tax on top — pushing combined rates to a population-weighted average of 9.55% statewide.
Tennessee has no income tax, so sales tax is the primary state revenue source — the 7% state rate plus typical 2.75% local rate produces some of the highest combined rates in the country.
Groceries in Tennessee
Tennessee taxes groceries at a reduced 4% state rate; local sales taxes still apply at full rate.
Sales Tax Holidays in Tennessee
Tennessee holds an annual back-to-school sales tax holiday on the last weekend of July covering clothing, school supplies, and computers.
How Tennessee Compares to Neighboring States
Sales tax on a $1,000.00 purchase in Tennessee versus neighboring states, using each state's average combined rate (state + local):
| State | State Rate | Combined Rate | Tax on $1,000 | vs. Tennessee |
|---|---|---|---|---|
| Tennessee (here) | 7.00% | 9.55% | $95.50 | — |
| Kentucky | 6.00% | 6.00% | $60.00 | -$35.50 |
| Virginia | 4.30% | 5.77% | $57.70 | -$37.80 |
| North Carolina | 4.75% | 7.00% | $70.00 | -$25.50 |
| Georgia | 4.00% | 7.40% | $74.00 | -$21.50 |
| Alabama | 4.00% | 9.29% | $92.90 | -$2.60 |
A negative "vs." figure means a lower sales tax bill on the same purchase. Specific addresses can vary materially from the state-wide average.
Frequently Asked Questions
What is the Tennessee sales tax rate for 2026?
Tennessee's state sales tax rate is 7.00% for 2026. When combined with the average local sales tax of 2.55%, most Tennessee residents pay a typical combined rate of 9.55%.
How much sales tax will I pay on a $100 purchase in Tennessee?
On a $100 purchase, expect approximately $7.00 in state sales tax, or about $9.55 including average local sales tax (combined 9.55%). Total cost: roughly $109.55.
Are groceries taxed in Tennessee?
Tennessee taxes groceries at a reduced 4% state rate; local sales taxes still apply at full rate.
Is sales tax calculated before or after discounts in Tennessee?
Tennessee follows the standard rule used by virtually all states: sales tax is calculated on the final discounted price, not the original price. If a $200 item is on sale for $150, you pay sales tax on $150. Manufacturer coupons can be treated differently in some states.
How is this Tennessee sales tax estimate calculated?
The calculator applies Tennessee's 7.00% state sales tax rate plus whatever local rate you enter (city + county + special districts). The default Local Rate is 0%; click a city in the table above to fill in its local portion, or look up your specific address with Tennessee's Department of Revenue tool.