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Tennessee sales tax, explained.

Thresholds, rates, taxability, filing schedules, and TNTAP — everything a remote seller needs to know about Tennessee, on one page.

Economic nexus threshold
$100,000
Statewide base rate
7%
Transaction threshold
None
NashvilleMemphisKnoxvilleChattanoogaClarksville
Tennessee · major filing jurisdictions
Nexus · Tennessee

When you owe sales tax in Tennessee.

Either physical presence or crossing the economic threshold creates the obligation to register, collect, and remit Tennessee sales tax. Tennessee uses a sales-only test — there is no transaction-count requirement.

Economic nexus
Threshold
$100,000 in retail sales delivered into Tennessee
Measurement type
Sales only — transaction count does not matter
Measurement period
Preceding 12 months (rolling)
Included
Retail sales into Tennessee, including exempt retail sales. Sales for resale and marketplace-facilitated sales are excluded from the threshold calculation.
Marketplaces
Marketplace-facilitated sales do not count toward your threshold — Tennessee explicitly excludes them. If a marketplace facilitator collects tax on your behalf, those sales are removed from your $100,000 measurement.
Physical nexus
Employees / remote staffOffice or leased propertyInventory · warehouse · 3PLAgents or representativesConstruction sites

Any physical presence in Tennessee creates nexus immediately, regardless of sales volume. This includes remote employees working from a Tennessee address, third-party fulfillment centers holding your inventory, and dependent or independent agents operating on your behalf in the state.

Rates · Tennessee

What you'll collect, city by city.

Tennessee's statewide base is 7% on most tangible goods (food is taxed at a reduced 4% state rate). Local option taxes add up to 2.75% on top, giving major cities combined rates between 9.25% and 9.75%. SaaS is taxable at the full combined rate — here is how the major cities compare.

JurisdictionCombined rateTangible propertyDigital goodsSaaSServices
TennesseeStatewide base rate7%7%0%7%0%
Nashville9.75%9.75%0%9.75%0%
Memphis9.75%9.75%0%9.75%0%
Knoxville9.25%9.25%0%9.25%0%
Chattanooga9.25%9.25%0%9.25%0%
Clarksville9.5%9.5%0%9.5%0%

Digital goods and most services are not subject to Tennessee sales tax. SaaS — including both B2B and B2C cloud software subscriptions — is taxable at the full combined rate of the delivery address. Rates verified as of June 11, 2026.

Need the exact rate for one address or invoice? Our calculator returns the combined state and local rate for any Tennessee delivery address.

Open the sales tax calculator
Taxability · Tennessee

Is your product taxable here?

Tennessee is one of the few states that explicitly taxes SaaS for both B2B and B2C sales, while leaving digital downloads and most services exempt. Know your category before you invoice.

Product categoryStatusWhat to know
Tangible personal propertyTaxablePhysical goods delivered into Tennessee are taxable at the combined rate of the delivery address. Groceries are taxed at a reduced state rate of 4%.
SaaS & cloud softwareTaxableTennessee taxes remotely accessed software as a taxable service, for both B2B and B2C customers. The full combined rate of the customer's address applies — there is no exemption for business use.
Digital goodsNot taxableElectronically delivered products such as downloaded software, e-books, and digital music are not subject to Tennessee sales tax.
Professional servicesNot taxableConsulting, legal, accounting, and similar professional services are exempt in Tennessee, unless they are bundled with taxable tangible property.
General servicesNot taxableMost general services are exempt — Tennessee does not broadly tax services the way it taxes tangible goods and SaaS.
Bundled SaaS + professional servicesPartialWhen a contract combines taxable SaaS with exempt professional services, Tennessee applies tax to the full contract price unless the exempt portion is separately stated and itemized on the invoice.
Filings · Tennessee

Filing schedules and due dates.

The Tennessee Department of Revenue assigns your filing frequency at registration based on your anticipated tax liability and adjusts it over time. All returns are filed through TNTAP — Tennessee Taxpayer Access Point.

FrequencyReturnDue dateWho it applies to
MonthlyMost common for active sellersTennessee Sales and Use Tax Return (filed via TNTAP)20th of the month following the reporting periodSellers with higher monthly tax liability, as assigned by the Department of Revenue
QuarterlyTennessee Sales and Use Tax Return (filed via TNTAP)20th of the month following the close of the quarter — Apr 20, Jul 20, Oct 20, Jan 20Mid-range sellers with moderate quarterly tax liability
AnnualTennessee Sales and Use Tax Return (filed via TNTAP)January 20 for the prior calendar yearSmall sellers with low annual tax liability, as assigned

Crossed the threshold, or about to?

A Commenda expert will review your Tennessee exposure, register you with the Department of Revenue through TNTAP, and take over the filing calendar — usually within a week.

The state authority

Tennessee Department of Revenue — TNTAP.

The Tennessee Department of Revenue administers sales and use tax through TNTAP — Tennessee Taxpayer Access Point. One login covers registration, filing, payment, and account management for all Tennessee tax types.

tntap.tn.gov

Registration requires your State Tax ID (format XXXXXXXXXX-SLC once issued), TNTAP username, and TNTAP password. New registrants create a TNTAP account as part of the registration flow.

What you can do there
  • Register for a sales tax account

    Registration is free. Out-of-state sellers register through TNTAP and receive a State Tax ID upon approval.

  • File returns and pay

    All returns, amendments, and payments are submitted through your TNTAP account. ACH debit and electronic check are accepted.

  • Look up the rate for any address

    The Tennessee Department of Revenue provides a rate lookup tool for verifying the combined state and local rate at a specific delivery address.

  • Verify a resale certificate

    Confirm that a customer's Tennessee sales tax account is active before honoring a resale exemption certificate.

Exposure & exemptions · Tennessee

If you're behind, or your buyers are exempt.

Back-period exposure & voluntary disclosure

Tennessee participates in voluntary disclosure programs for out-of-state sellers who come forward proactively. Disclosing before the Department contacts you limits your lookback and can reduce penalties.

Lookback
Typically limited to 3 years under a VDA — versus a longer exposure window if the Department initiates the audit
Penalties
Generally waived under a voluntary disclosure agreement
Interest
Still due on unpaid tax — interest relief is not typically part of a standard Tennessee VDA
Unfiled returns
No statute of limitations on periods where no return was filed — disclosure limits the practical lookback

Exemption certificates accepted

Collect a valid exemption certificate at the time of sale and retain it in your records. The burden of proving an exemption is valid rests with the seller.

Resale
Tennessee Sales and Use Tax Certificate of Resale — Tennessee does not use the MTC Uniform Resale Certificate for in-state purchases
Multi-state (MTC)
The MTC Uniform Sales and Use Tax Certificate is accepted for purchases by out-of-state buyers for resale in other states; Tennessee is not an SST member state
Industrial machinery
Partial exemption for machinery and equipment used directly in manufacturing — Tennessee Form Sales and Use Tax Industrial Machinery Certificate
Nonprofit / government
Qualifying nonprofit organizations and government entities may claim exemption with a Tennessee-issued exemption certificate or government purchase order

FAQ · Tennessee

Tennessee questions, answered.

The questions remote sellers ask us most about Tennessee sales tax.
Read our FAQ library

Yes. Tennessee explicitly taxes remotely accessed software — SaaS — as a taxable service. This applies to both B2B and B2C sales. The full combined rate of the customer's delivery address applies, with no exemption for business purchasers. This makes Tennessee one of the more aggressive states for software companies selling into the state.

No. Tennessee uses a sales-only test: $100,000 in retail sales delivered into the state during the preceding 12 months. There is no 200-transaction alternative. If your Tennessee sales stay below $100,000, you do not have economic nexus regardless of how many orders you shipped.

No. Tennessee explicitly excludes marketplace-facilitated sales from the economic nexus threshold. If Amazon, Shopify Markets, or another registered marketplace facilitator collects and remits tax on your behalf, those sales do not count toward your $100,000 measurement. You may still have separate registration obligations if you sell direct.

No. Electronically delivered digital products — including downloaded software, e-books, digital music, and streaming content — are not subject to Tennessee sales tax. This is distinct from SaaS: if your product is accessed remotely without a download, it is taxable as SaaS; if it is a one-time download to the customer's device, it is exempt as a digital good.

The statewide base rate is 7% on most tangible personal property and taxable services including SaaS. Grocery food items are taxed at a reduced state rate of 4%. Local jurisdictions add up to 2.75%, bringing the combined rate in major cities to between 9.25% and 9.75%.

Returns are due on the 20th of the month following the close of the reporting period. Monthly filers submit by the 20th of each following month. Quarterly filers are due April 20, July 20, October 20, and January 20. Annual filers are due January 20 for the prior calendar year. All returns are filed through TNTAP.

Yes, if your Tennessee SaaS sales exceed $100,000 in the preceding 12 months. Because Tennessee taxes SaaS at the full combined rate, SaaS revenue counts as retail sales toward the economic nexus threshold. Once you cross $100,000, you must register, collect, and remit on all taxable Tennessee sales.

Yes. Commenda monitors your Tennessee exposure, registers you with the Department of Revenue through TNTAP, calculates the right rate on every transaction including SaaS, and files each return on the assigned schedule. Book a call to see it on your own data.

United States

Sales tax, state by state.

* No state-level sales tax. Alaska's local jurisdictions still enforce economic nexus through the ARSSTC.