Continuing a business in Tennessee requires a proper understanding of taxation. However, understanding the ins and outs of sales tax in Tennessee is not an easy job. It requires years of expertise and knowledge in this field. At Tax 365, we will help you to manage sales tax in Tennessee in 2025. We provide you with an accurate calculation of the sales tax in Tennessee through our online sales tax calculator Tennessee. Sales tax is basically a percentage-based tax that is imposed on goods and services. It is collected and remitted to the government to fund public services, community programs, and infrastructure. Tennessee’s sales tax rate is the highest in the nation and it is applicable to most of the retail goods, leases, and rentals of tangible property as well as services. 

In Tennessee, there are mainly two components of sales rate – one is the statewide sales tax rate and the other is the local tax rate. Along with statewide sales tax local tax sales tax is also applied. The statewide sales tax rate in Tennessee is 7%. Along with this, a local sales tax rate is applied which ranges between 1.5% to 2.75% depending on the location where your business is situated. The taxable items in Tennessee include most of the retail goods like clothing, furniture, electronics, goods and restaurant meals, alcoholic beverages & various other digital goods such as e-books, music downloads, and whatnot. On the other hand, there are certain goods that are exempted from Tennessee sales tax including prescription medicines, different types of medical supplies, and grocery tax in Tennessee. Submitting the right tax amount based on Tennessee sales tax by county is a difficult task as the rate of the local tax changes location wise and therefore, a professional tax service provider can better guide you in this process ensuring your business submits tax on time while complying with regulatory protocols.