Tennessee sales & use tax.
The facts an advisor checks first — rate, nexus threshold, marketplace rules — with links to the controlling authority.
Tennessee: rate, nexus & administration.
- State rate
- 7%
- Local rates
- Local rates add up to 2.75%, with a single-article cap on the local portion
- Economic nexus
- $100,000 in sales · effective October 1, 2019Measured on the prior 12 months; lowered from $500,000 effective October 1, 2020.Controlling authority: Tenn. Comp. R. & Regs. 1320-05-01-.129 (as amended by 2020 Pub. Ch. 759) ↗
- Marketplace facilitator
- Yes — effective October 1, 2020
- Streamlined (SST)
- Associate member
- Administered by
- Tennessee Department of Revenue ↗
What to watch in Tennessee
- SaaS has been taxable since 2015 — remotely accessed software is treated as the use of computer software in Tennessee.
- Groceries are taxed at a reduced 4% state rate plus local tax.
- The local single-article cap (local tax applies only to the first $1,600) is a frequent over/under-collection point.
Rates, thresholds, and taxability change mid-year — verify against the Tennessee Department of Revenue before advising. In L3i, every determination is cited to the controlling authority.
The Tennessee voluntary disclosure agreement.
Behind in Tennessee? There’s a front door. The voluntary disclosure program lets a business settle unregistered-period exposure on defined terms — before the state finds it first. The terms that shape the client conversation:
Administered by the Tennessee Department of Revenue ↗ · also reachable through the MTC multistate voluntary disclosure program. Program terms as of February 2026 — confirm current terms before filing. L3i pairs the exposure math with the filing itself — see exposure analysis & VDA services.
Tennessee, in brief.
What is the economic nexus threshold in Tennessee?
$100,000 in sales, effective October 1, 2019. Measured on the prior 12 months; lowered from $500,000 effective October 1, 2020. Once the threshold is crossed, remote sellers must register with the Tennessee Department of Revenue and begin collecting.
What is the sales tax rate in Tennessee?
The state sales tax rate is 7%. Local rates add up to 2.75%, with a single-article cap on the local portion.
Do marketplace facilitators collect Tennessee sales tax?
Yes — marketplace facilitators have been required to collect since October 1, 2020. Direct (non-marketplace) sales remain the seller’s obligation.
How does a remote seller register for Tennessee sales tax?
Register with the Tennessee Department of Revenue before collecting — a remote seller must register once it crosses the economic nexus threshold ($100,000 in sales).
Does Tennessee offer a voluntary disclosure agreement (VDA)?
Yes — the Tennessee Department of Revenue administers a voluntary disclosure program with a lookback of 36 months (3 years). Penalties are generally waived; interest is generally still due. An advisor can approach the state anonymously before disclosing the client’s identity.
A page tells you the rule. The platform applies it — and remembers why.
L3i runs Tennessee determinations against a deterministic rules engine, cites the controlling authority, and captures your firm’s judgment so the next Tennessee question starts further ahead.
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