Tennessee — Sales & Use Tax

Tennessee imposes a sales tax on persons engaging in the business of selling tangible personal property at retail in the state. The tax is levied on the sales price of each item or article sold at retail and is computed on gross sales for remittance purposes. The state also imposes a use tax on tangible personal property that is used, consumed, distributed, or stored for use or consumption in Tennessee when sales tax was not collected, preventing duplication of tax. Additionally, certain services are subject to sales and use tax at the same rate as tangible personal property. Generally, all dealers are liable for collecting sales tax from their customers and remitting the tax to the Department of Revenue, while Tennessee residents and businesses must pay use tax when sales tax was not collected by the seller on otherwise taxable products.

Source: Tennessee Sales and Use Tax Manual, June 2025

Tennessee imposes a state sales tax at a general rate of 7% on retail sales of tangible personal property and taxable services. Food and food ingredients intended for human consumption are taxed at a reduced state rate of 4%. These state rates do not include local option sales taxes, which counties and municipalities may levy up to an additional 2.75%. The combined state and local rate varies by jurisdiction based on the applicable local tax.

Source: Tennessee Department of Revenue — Sales and Use Tax

Tennessee requires remote sellers with no physical presence to register and collect sales tax if they make sales exceeding $100,000 to Tennessee customers during the previous tax year. This threshold is based solely on revenue; Tennessee does not impose a transaction count requirement. Remote sellers meeting the $100,000 threshold must register and begin collecting tax on the first day of the third month following the month they exceed the threshold. This economic nexus standard became effective October 1, 2020, lowering the prior $500,000 threshold.

Source: Tennessee Sales and Use Tax Manual, December 2025

Tennessee requires marketplace facilitators to collect and remit sales tax on sales facilitated for marketplace sellers when the facilitator makes or facilitates more than $100,000 in total sales to Tennessee customers during the previous twelve-month period. This threshold includes both the facilitator's own sales and sales facilitated for third-party sellers. The collection requirement became effective October 1, 2020. When a marketplace facilitator collects tax on a facilitated sale, the marketplace seller is not obligated to collect or remit tax on that same transaction.

Source: Tennessee Department of Revenue — Out of State Dealers Marketplace Facilitators

Tennessee sales and use tax returns are due on the 20th day of the month following the end of the reporting period. When the 20th falls on a weekend or legal holiday, the deadline extends to the next business day. All dealers must file and pay electronically through the Tennessee Taxpayer Access Point (TNTAP), the Department of Revenue's online portal.

Filing frequency assignment

The Tennessee Department of Revenue assigns each dealer's filing frequency—monthly, quarterly, or annually—based on the dealer's sales volume or tax liability. Sales tax accounts are automatically set up for monthly filing upon registration. Dealers with an average monthly sales tax liability of $1,000 or less over a 12-month period may elect to file monthly or quarterly. This election option became effective July 1, 2021, and requires a 12-month filing history before the dealer may request a change to quarterly filing.

Annual filing generally applies only to manufacturers, wholesalers, and marketplace sellers that make sales exclusively through a marketplace facilitator that is already collecting and remitting Tennessee sales tax on those transactions.

Due dates by filing frequency

• Monthly filers: 20th day of the month following the reporting period (e.g., January sales are due February 20).
• Quarterly filers: 20th day of the month following the end of the quarter. The quarterly due dates are January 20 (for Q4 of the prior year), April 20 (for Q1), July 20 (for Q2), and October 20 (for Q3).
• Annual filers: January 20 of the following year.

Dealers must file a return for each assigned reporting period even if no sales tax was collected during that period. A "zero return" must be filed to avoid penalties and interest charges for failure to file.

Source: Tennessee Sales and Use Tax Manual, June 2025, p. 30 Source: Instructions: Tennessee Sales and Use Tax Return (Form SLS-450), July 2021 Source: Completing the Sales Tax Return, Tennessee Department of Revenue, October 2021, pp. 8–9

Tennessee retailers making purchases for resale must provide suppliers with a resale certificate to avoid paying sales or use tax on inventory they intend to resell. When a retailer registers for a Tennessee sales and use tax account, the Tennessee Department of Revenue automatically issues a Blanket Certificate of Resale for each business location. This certificate can be downloaded and printed through the Tennessee Taxpayer Access Point (TNTAP) portal after registration.

Proper use of resale certificates

A resale certificate may be used only when purchasing merchandise that the business will resold in the ordinary course of business. The certificate cannot be used to purchase items that will be consumed, used, or otherwise withdrawn from inventory by the business itself. If merchandise obtained under a resale certificate is extracted from inventory for promotional purposes, as gifts, or for personal use, the retailer must report the withdrawal on its sales tax return and remit tax directly to the Department of Revenue.

Out-of-state resale certificates

Effective January 10, 2022, Tennessee began accepting resale certificates issued by other states. An out-of-state dealer may provide its home-state resale certificate bearing the sales tax ID number issued by another state, or may provide a fully completed Streamlined Sales Tax Exemption Certificate containing another state's sales tax ID number, to make purchases for resale from Tennessee suppliers without paying Tennessee sales or use tax. This change reversed Tennessee's prior Rule 96, which had required out-of-state dealers to register in Tennessee and obtain a Tennessee resale certificate.

Out-of-state dealers that are not required to register for sales and use tax in any state (for example, dealers located in states that do not impose sales and use tax, such as Delaware, Montana, New Hampshire, or Oregon) may furnish a Tennessee supplier with a fully completed Streamlined Sales Tax Exemption Certificate that includes a tax ID number issued by their home state for another tax type (such as a business tax or excise tax number) or their federal employer identification number (FEIN). Foreign dealers not registered in any U.S. state must provide a fully completed Streamlined Sales Tax Exemption Certificate with a tax ID number issued by their home country.

Seller responsibilities and good-faith acceptance

Sellers that obtain and retain a valid resale certificate from a purchaser and follow the certificate requirements under Tenn. Code Ann. § 67-6-409 are relieved of liability for sales tax if the purchaser improperly claimed the exemption; in that case, the purchaser becomes liable for the tax. When a seller has a recurring business relationship with a purchaser, the seller is relieved from sales tax liability if it has obtained a blanket exemption certificate from the purchaser. Sellers are not required to update or renew blanket exemption certificates when there is a recurring business relationship.

The Tennessee Department of Revenue recommends that sellers periodically review resale and exemption certificates in their records. Purchasers must provide a new resale certificate if there are changes in the purchaser's business (such as a change in ownership or address) or if the certificate has expired (in the case of renewable exemption certificates such as agricultural or nonprofit certificates). Sellers making sales to a purchaser who has not made a purchase for more than one year (i.e., does not have a "recurring business relationship") may request a current resale certificate or may verify that the certificate in their records is still valid through TNTAP under "Sales and Use Tax Certificate Lookup" and "Verify a Sales and Use Tax Certificate." Verification does not relieve the seller of the responsibility of obtaining and keeping a copy of the certificate to document the exempt sale.

Sellers that do not follow the certificate requirements of Tenn. Code Ann. § 67-6-409 are liable for the tax. Sellers that fraudulently fail to collect tax or that solicit a purchaser to participate in the unlawful claim of an exemption are also liable for the tax.

Source: Tennessee Department of Revenue — Resale Certificate Source: SUT-32 — Appropriate Use of a Resale Certificate, Tennessee Department of Revenue Source: SUT-33 — Out-of-State Resale Certificates, Tennessee Department of Revenue Source: SUT-184 — Updating Resale and Exemption Certificates, Tennessee Department of Revenue