Tennessee sales tax on food. The local tax rate varies by county and/or city.
Tennessee sales tax on food The Knox County Sales Tax is collected by the merchant on all qualifying sales made within Knox County Knox County collects a 2. 75%. The due date for the sales and use tax return is the 20th of the month following the end of the reporting period. (Note: Local sales tax may still apply in some states that have exempted groceries at the state level. For example, it your tax rate is 10 percent, and you sold $1,000 in total If a food truck or other mobile vendor makes Tennessee sales at various temporary locations within Tennessee, the vendor should register its primary business location for sales and use tax purposes. Sales of all other tangible personal property and taxable services remain subject to the City of Hendersonville’s local sales tax rate of 2. This page discusses various sales tax exemptions in Tennessee. 75% in Tennessee is known for its vibrant culture, historic landmarks, and delicious Southern cuisine. 25% local sales tax, the maximum local sales tax allowed under Tennessee law Campbell County has a lower sales tax than 69. Jul 26, 2025 · As families across Tennessee take advantage of the state’s annual back-to-school sales tax holiday weekend, another conversation is quietly gaining momentum: why are Tennesseans still paying These instructions apply to Tennessee’s sales and use tax return for periods beginning on or after July 1, 2025. The sales tax is comprised of two parts, a state portion and a local portion. 2 The sales tax revenue generated from groceries is a much smaller piece of the overall pie, approximately $700 million per year. Mandatory tips Voluntary tips paid by the customer at the end of the meal and returned in full to Prepared food is subject to the general state sales and use tax rate of 7%, plus the applicable local tax rate. Get answers to Tennessee sales tax! Is food taxed in Tennessee? In Tennessee, food is subject to sales tax. Previously, the state sales tax rate on food and food ingredients was 5%. Below is a list of six transactions that are subject to Tennessee sales and use tax for restaurants in addition to normal food and drink sales. Acts, ch. “City tax rate” means a rate adopted in a city or town that is equal to the difference between the county tax rate and city tax rate, when the county tax rate is below 2. Click here for a larger sales tax map, or here for a sales tax table. com Tennessee is one of 10 states to impose a sales tax on groceries. However, the rate at which food is taxed in Tennessee is different from other taxable items. This local tax is added on top of the state’s 4% food tax rate. Learn about state, county, and special tax rates for businesses in Memphis, Tennessee. However, there are exceptions and exemptions that apply, depending on the type and preparation of the food items. May 10, 2024 · 1. Mar 27, 2025 · The state sales tax rate for most taxable items and services is 7%. Jun 16, 2025 · Explore the 2025 guide to Memphis sales tax rates. 619%. Oct 31, 2023 · Food tax in Tennessee: End of tax-free groceries Tennessee is one of only 13 states that still tax groceries. Jul 1, 2013 · (b) The retail sale of food and food ingredients sold as prepared food, alcoholic beverages, candy, dietary supplements and tobacco shall be taxed at the rate levied on the sale of tangible personal property at retail by § 67-6-202. Here's why it won't be coming back this year. This guide provides a comprehensive overview of sales tax in Nashville, Tennessee. Rates include state, county and city taxes. Dec 20, 2024 · The City of Hendersonville has enacted a local sales tax rate reduction on the retail sale of food and food ingredients. 25% local sales tax rate applies only to the retail sale of food and food ingredients. 25% local sales tax, the maximum local sales tax allowed under Tennessee law Knox County has a lower sales tax than 69. In Tennessee, food tax is levied at a state level, with a sales tax rate of 7% on most grocery items; however, prepared foods, such as restaurant meals, carry a higher tax rate. 75% in sales tax on essentials like bread and milk in some areas with local sales taxes. The local tax rate varies by county and/or city. Exemptions to the Tennessee sales tax will vary by state. 2. 5%) The local option sales tax is collected on the first $1,600 of the sales price of a single article. Dec 23, 2024 · The sales tax is typically 7%, but some products or services have different rates, including food which is taxed at 4%. At its core, House Bill 21 seeks to clarify and simplify the sales tax framework for food items sold for human consumption. §§ 67-6-102 and 67-6-228. Tenn. Jun 16, 2025 · For businesses selling to customers in Nashville or Davidson County, understanding local sales tax regulations is essential. Sales and Use Tax Overview The sales tax is Tennessee’s principal source of state tax revenue accounting for approximately 60% of all tax collections. Looking for information on sales tax in Tennessee? Use our comprehensive sales tax guide for the state of Tennessee. How taxes are calculated on a restaurant? Multiply your sales tax rate by the sum total of all the taxable items sold during the month. This guide clarifies state and local rates, definitions of taxable items, and available exemptions. Don’t let sales tax complexities hold your business back. Effective July The reduced 2. Jun 10, 2025 · Knoxville wants to increase its sales tax. 2020 rates included for use while preparing your income tax deduction. The Campbell County Sales Tax is collected by the merchant on all qualifying sales made within Campbell County Campbell County collects a 2. 1. 7/1/2017. We’ll explain the differences between state, county, and city sales tax rates, how to calculate sales tax in Nashville, and whether your business needs to collect sales tax. Tennessee applies a reduced state sales tax rate of 4% on food and food ingredients for home consumption. In Tennessee, grocery sales tax is 4%. Reference: Important Notice 17-21. Are Food and Meals subject to sales tax? While Tennessee's sales tax generally applies to most transactions, certain items have special treatment in many states when it comes to sales taxes. To learn more, explore this comprehensive guide to understanding Tennessee's sales tax. Dec 9, 2024 · After years of temporary tax holidays – and blaming Bidenomics for punting on permanent cuts – Tennessee House Republicans are pitching a bill to eliminate the state's 4% sales tax on food As of July 1, 2017, food and food ingredients are subject to a reduced sales and use tax rate of 4%, plus the applicable local tax rate. g. The proposal exempts groceries, and Tennessee already doesn't put a sales tax on products such as gasoline and prescription drugs. Oct 2, 2025 · Understand sales tax on grocery items by state and how it differs from prepackaged or restaurant food. Prescription medicine and goods purchased for resale are tax-exempt in Tennessee, but groceries are taxed at a reduced rate. There are a total of 313 local tax jurisdictions across the state, collecting an average local tax of 2. The three-month sales tax moratorium on food ends Tuesday. Sales Tax: Local Option Sales Tax: 2. Sales of food and food ingredients are subject to a reduced state sales and use tax rate of 4%, plus the applicable local tax rate. The maximum local sales tax rate allowed by law is 2. Aug 18, 2025 · Here’s a look at which states still have a food or grocery sales tax in 2025. 323,s 1, eff. This is not a complete list of taxable transactions and as some of these situations can be nuanced, we always recommend researching in more detail. Tennessee has state sales tax of 7%, and allows local governments to collect a local option sales tax of up to 2. What purchases are exempt from the Tennessee sales tax? While the Tennessee sales tax of 7% applies to most transactions, there are certain items that may be exempt from taxation. Several examples of of items that exempt from Tennessee sales tax are medical supplies, certain groceries and food items, and items used in packaging. 917 (2024) creates a new "city tax rate" that may apply to the retail sale of food and food ingredients. Oct 28, 2025 · Answer: Tennessee sales tax applies to retail sales of tangible personal property, prepared food, telecommunications services, cable television, digital products, and admission to entertainment events. Ch. Amended by 2017 Tenn. 5% State sales tax on unprepared foods and food ingredients: 6% (total rate 8. Aug 16, 2025 · Local Sales Taxes on Food In addition to the state sales tax, local jurisdictions in Tennessee, including counties and cities, have the authority to impose their own local sales taxes on food. The law does not define prepared food as food or food ingredients, which are subject to a reduced state rate of 4%, plus the applicable local tax rate. Tennessee sales tax serves as the primary source of state tax revenue and makes up approximately 60% of all tax collections. Apr 9, 2025 · House Bill 21, introduced on April 9, 2025, aims to amend existing tax regulations concerning food and food ingredients, a topic that touches the lives of every Tennessean. Catering TAXABLE Mar 27, 2025 · Food and food ingredients are defined as liquid, concentrated, solid, frozen, dried, or dehydrated substances that are sold to be ingested or chewed by humans and are consumed for their taste or nutritional value. However, there are exceptions. 5%) State sales tax on all other tangible personal property unless specifically exempted: 7% (total rate 9. The local option portion is imposed by city and/or county governments and was first enacted under the 1963 Local Option Revenue Act. The calculator will show you the total sales tax amount, as well as the county, city, and special district tax rates in the selected location. Nov 15, 2024 · We’ll cover everything you need to know about sales tax on food and beverage items in Tennessee to keep your business compliant. Stay compliant with state and local sales tax rules. Mar 11, 2024 · Bill to end Tennessee grocery tax advances in General Assembly “Tennessee’s sales tax rate on food currently stands at 4%, with local jurisdictions able to add up to an additional 2. Effective February 1, 2025, the new reduced local sales tax rate for food and food ingredients sold in the City of Hendersonville is 2. Local jurisdictions add their standard local tax rates to this base rate, creating total food tax rates between 6. Are there any exemptions on food items in Tennessee? Yes, specific food items such as unprepared groceries, including fruits, vegetables, milk, and bread, are exempt from sales tax. All local jurisdictions in Tennessee have a local sales and use tax rate. What is the sales tax rate on food in Tennessee? The sales tax rate on food in Tennessee is 7%, as of July 2021. Schedule a free consultation with our experts today to see how we can help your business stay on track and avoid penalties. This page describes the taxability of food and meals in Tennessee, including catering and grocery food. 5% to 7. Certain Cities and Towns May Adopt Reduced Sales Tax Rate on Food and Food Ingredients Pub. May 10, 2024 · Yes, Tennessee does impose a sales tax on food. The general state tax rate is 7%. This rate is substantially lower than the general state sales tax rate of 7% applied to most other tangible personal property. The legislation comes after the state’s handful of Democratic lawmakers have unsuccessfully introduced similar proposals as they argue that Tennesseans are paying as much as 6. Therefore, sales of prepared food are subject to the standard 7% state sales tax rate, plus the applicable local sales tax rate. Learn how the Tennessee grocery tax works, from reduced rates on staples to full tax on prepared foods. Jul 31, 2024 · Last year, the state offered a three-month grocery tax holiday for Tennessee shoppers. FAQs What is the sales tax rate on food in Tennessee? Jan 16, 2025 · For every percent of sales tax on groceries that is removed, that's 100 million dollars that's also removed from the state budget, said Hawk. 25%. The Tennessee Sales Tax Handbook provides everything you need to understand the Tennessee Sales Tax as a consumer or business owner, including sales tax rates, sales tax exemptions, and more. Tennessee Restaurant Tax Guide Prepared by Sales Tax Helper Table of Contents Introduction General Rules Meals and Drinks Exempt Sales Alcoholic Beverages Tips & Gratuities Rules Employee Meals Complimentary Meals Taxable Purchases Food Delivery Delivered by Business Direct Third-Party Delivery (e. Furthermore, of these states, Tennessee has the second-highest combined state and local sales tax rate on food, second only to Oklahoma. gov Mar 27, 2025 · Prepared food is not considered food or food ingredients for sales tax purposes. The local tax rate may not be higher than 2. Tennessee imposes sales tax on most food items bought for consumption, with some exceptions and special circumstances. You can use our Tennessee Sales Tax Calculator to look up sales tax rates in Tennessee by address / zip code. Three states allow local governments to tax food. 9% of Tennessee's other cities and counties Campbell County Tennessee Sales Tax In Tennessee, Republican legislative leaders have proposed abolishing the state’s 4% sales tax on groceries. The current state sales tax rate in Tennessee is 7%, but local sales tax rates may vary and can go up to an additional 2. Navigate Tennessee's sales tax landscape with our comprehensive guide, covering compliance, rates, and regulations to keep your business on track. . Mar 25, 2025 · ⏩ Read today’s top stories on wkrn. This means that an individual in the state Mar 27, 2025 · If a food truck or other mobile vendor makes Tennessee sales at different temporary locations in Tennessee, the vendor should register its primary business location for sales and use tax purposes. Jan 1, 2021 · The latest sales tax rates for cities in Tennessee (TN) state. Tennessee State Government - TN. Local Sales Tax 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. While the reduced grocery tax rate is 4% (as opposed to the regular 7% sales tax rate Oct 28, 2023 · Grocery shoppers in Tennessee have been exempted from paying state and local sales taxes on most food items since Aug. Let’s delve deeper into the intricacies of food taxation in Tennessee. Simplify tax collection and ensure compliance with Commenda’s powerful sales tax automation tools. Sales and use tax have two parts: a state portion and a local option portion. For example, sales of food and food ingredients are taxed at a state rate of 4%. 25. Nov 22, 2025 · The statewide sales tax rate on food and food ingredients purchased for home consumption is 4%. Code Ann. Aug 16, 2025 · Unravel Tennessee’s sales tax on food. Additionally Jun 16, 2025 · Learn everything about sales tax in Tennessee from the sales tax rate to the rules around nexus. Due Dates Sales Tax due dates depend on how frequently you file your return: The Tennessee sales tax rate is 7% as of 2025, with some cities and counties adding a local sales tax on top of the TN state sales tax. Oct 22, 2025 · Is food taxable in your state? This guide breaks down sales tax rules for groceries, hot meals, and prepared food across all 50 states. To learn more, see a full list of taxable and tax-exempt items in Tennessee. Learn more in this 2025 guide. , Uber Eats) Audit Considerations Voluntary Disclosure Agreements (VDAs) Tax Collected Is the Tennessee is one of eighteen states that fully tax food (that is, the full state sales tax is applied to food for home consumption). ) Food Tax Official Government Website for Montgomery County, TN. 7/1/2013. Yes, there is tax on food in Tennessee. Amended by 2013 Tenn. However, prepared foods such as meals from restaurants or food that is heated by the seller What transactions are generally subject to sales tax in Tennessee? In the state of Tennessee, sales tax is legally required to be collected from all tangible, physical products being sold to a consumer. 181,s 30, eff. However, when it comes to the financial aspects of shopping for groceries in Tennessee, a critical question arises: Does Tennessee have a tax on food? In this comprehensive article, we will explore Tennessee’s tax system concerning food purchases, dive into the details of exemptions, and discuss Aug 15, 2022 · Is restaurant food tax free in Tennessee? In 2020, the August sales tax holiday allowed Tennesseans to enjoy food and drinks at their favorite restaurant – without paying sales tax. 75% and must be a multiple of . 9% of Tennessee's other cities and counties Knox County Tennessee Sales Tax Exemptions TN has a 7% state sales tax plus local taxes. Jan 10, 2025 · Make grocery shopping great again by eliminating Tennessee's sales tax on food | Opinion Voters clearly sent a message in 2024 that their top concern is the economy, cost of living and rising prices.