Local Sales Tax and Single Article
Any county or incorporated city, by resolution or ordinance, may levy the local sales and use tax on the same privileges that are subject to the state’s sales or use tax. The local tax rate may not be higher than 2.75% and must be a multiple of .25. All local jurisdictions in Tennessee have a local sales and use tax rate. The local sales tax rate and use tax rate are the same rate. Local sales and use taxes are filed and paid to the Department of Revenue in the same manner as the state sales and use taxes.
Local Tax Rate Look Up
The local sales tax rate map is a complete and up-to-date list of the tax rate for each jurisdiction.
Taxpayers may also use the Tennessee sales tax jurisdiction and tax rate database to lookup Tennessee state and local tax rates and local jurisdiction SITUS and FIPS codes. See helpful hints for tax rate lookups.
You can download sales tax rate tables and the boundary database, however, you should consider reading the Streamlined Sales Tax Technology Guide (Chapter 5, Rate and Boundary Files) to help you understand what these files include and how to use the files to determine the correct tax rate. These files are created for use in tax calculation applications to determine the tax rate. It is difficult to determine a rate by simply looking at the files.
Single Article Local Tax Base Limitation
The local tax is applied only to the first $1600 of the sales price of any single article of tangible personal property in most local jurisdictions.
A single article of tangible personal property is defined as one item, exclusive of accessories, that is capable of being sold by the seller as an independent unit or common unit of measure. The single article local tax base limitation applies to each commonly understood single item of tangible personal property. The single article local tax limitation does not apply to a single invoice total when multiple items of tangible personal property are included on the invoice. Note, the price of motor vehicle and boat dealer installed accessories sold in conjunction with a motor vehicle or boat are to be included the price that is subject to the single article local tax limitation. The entire sales price of custom (non-prewritten) computer software, computer software maintenance contracts, services, amusements, specified digital products, and warranty or service contracts covering tangible personal property is subject to local tax. The single article local tax limitation does not apply to such sales.
To determine the amount of local tax, multiply the sales price of a single article of tangible personal property, up to the local tax base limitation (usually $1,600), by the local tax rate. The local tax will not apply to any portion of the price of a single article of tangible personal property that exceeds the local tax base limitation for that local jurisdiction. See the Single Article Local Tax Base Limitation chart.
|Special Local Tax Rates|
|Local Tax Rate||Reference|
|Electric power or energy (natural or artificial gas, coal or fuel oil, aviation fuel, and other energy fuels)||0.0%||Tenn. Code Ann. §67-6-704|
|Industrial water for manufacturers||.5%||Tenn. Code Ann. §67-6-702|
|Intrastate telecommunications||2.5%||Tenn. Code Ann. §67-6-702|
|Residential interstate and international telecommunications||1.5%||Tenn. Code Ann. §67-6-702|
|Business interstate and international telecommunications||0.0%||Tenn. Code Ann. §67-6-702|
|Vending machine sales (food and non-food)||2.25%||Tenn. Code Ann. §67-6-702|
|Specified digital products||2.5%||Tenn. Code Ann. §67-6-702|
|Video programming services (cable TV monthly charge from $0-$27.50)||0.0%||Tenn. Code Ann. §67-6-714|
|Direct-to-home satellite television services||0.0%||Federal law|
|Qualified common carriers direct pay use tax on Tennessee purchases of tangible property that is used outside the state||1.5%||Tenn. Code Ann. §67-6-702|