Tennessee sales tax at a glance
| State base rate | 7% |
| Average combined rate | ~9.55% (state + county + city + districts) |
| National rank | 2 of 51 by average combined rate (all-state average 6.61%) |
| Groceries | Reduced rate |
| Major cities | Nashville, Memphis, Knoxville, Chattanooga, Clarksville |
Worked examples — what you actually pay in Tennessee
Using the average combined rate of 9.55% (your exact city rate may be higher or lower):
| Purchase | Tax | Total |
|---|---|---|
| $25 | $2.39 | $27.39 |
| $100 | $9.55 | $109.55 |
| $500 | $47.75 | $547.75 |
| $1,000 | $95.50 | $1095.50 |
| $10,000 | $955.00 | $10955.00 |
Sales tax rates
Chart: DailyFinance.tools · Rates are reviewed averages from our state tax dataset — your exact local rate may differ.
How Tennessee compares with other states
The states closest to Tennessee on average combined rate, plus the national extremes — all rates are average combined (state + local):
| State | Average combined rate | Tax on $1,000 |
|---|---|---|
| Tennessee (this page) | 9.55% | $95.50 |
| Louisiana | 9.56% | $95.60 |
| Arkansas | 9.44% | $94.40 |
| Washington | 9.38% | $93.80 |
| Alabama | 9.29% | $92.90 |
| Louisiana — highest in the US | 9.56% | $95.60 |
| Oregon — lowest in the US | 0% | $0.00 |
What this means in Tennessee
At 9.55% average combined, Tennessee sits near the top of the national table — rank 2 of 51, 2.94 points above the all-state average of 6.61%. On a $10,000 purchase the tax is about $955, roughly $294 more than the same purchase at the average state's rate. For big-ticket items, confirming the exact local rate before you buy is worth real money.
Groceries are taxed at a reduced rate in Tennessee, so the food shop carries some tax but less than the full 9.55% combined rate applied to other goods. The reduced rate and any local add-ons are set out in the groceries note above; the exact figure varies by locality, so check it before treating a food budget as tax-free.
How to calculate Tennessee sales tax (3 steps)
- Find your combined rate. Start with the 7% state rate, then add your county, city and any special-district rates for the exact purchase location.
- Multiply. Tax = taxable price × (combined rate ÷ 100). Shipping and discounts change the taxable base in some cases — discounts usually reduce it, delivery charges vary.
- Add (or extract). Total = price + tax. Working backwards from a tax-inclusive price: pre-tax price = total ÷ (1 + rate ÷ 100). Our calculator does both directions instantly.
Groceries and exemptions in Tennessee
Groceries are taxed at a reduced 4% state rate, plus local taxes — Tennessee has among the highest average combined sales taxes in the US. Prescription medicines are exempt in almost every state; clothing, services and digital goods follow state-specific rules, so check the Tennessee Department of Revenue for category detail before assuming an item is tax-free.
Sales tax in major Tennessee cities
Combined rates inside Tennessee are set city by city:
Selling into Tennessee? Read this
If you sell online and ship to Tennessee, economic nexus rules generally require you to collect tax once your Tennessee sales pass the state's threshold (commonly $100,000). You collect at the rate for the buyer's delivery address — which is why combined-rate accuracy matters more than the state base rate. The full calculator lets you test any rate, extract tax from totals, and model VAT for international sales.