Tennessee LLC Sales Tax — 7% State + Local Rates

Tennessee has a 7% state sales tax rate (Tennessee tax law) plus local additions up to 2.75%, for a combined maximum of 9.75% — one of the highest combined rates in the country. If your LLC sells taxable goods, register with the Tennessee Department of Revenue using TNTAP (Tennessee Taxpayer Access Point). For the full tax guide. For formation, see how to form a Tennessee LLC.

Tennessee Sales Tax Structure

Level	Rate	Notes
State	7%	On most tangible goods
Local (county/city)	Up to 2.75%	Varies by location
Combined maximum	9.75%	Among highest nationally
Food (state rate)	4%	Reduced rate for unprepared food
Food (local additions)	Up to 2.75%	Local rate still applies

Registration (Form STS-001 via TNTAP)

Register for a Sales and Use Tax account at tntap.tn.gov (Tennessee Taxpayer Access Point):

1. Create TNTAP account at tntap.tn.gov
2. Submit online Sales and Use Tax Registration (replaces Form STS-001)
3. Provide EIN, Articles of Organization (Form SS-4270) details, and business location
4. Receive your Sales Tax Certificate of Registration — must be displayed at each place of business per Tennessee tax law
5. Begin collecting on your first taxable sale

Tennessee quirk: The registration is free, but failure to register before making taxable sales is a Class B misdemeanor under Tennessee tax law. File returns monthly (due 20th of following month) via TNTAP. Annual filers available for LLCs with less than $400/month in tax liability.

What's Taxable

• Tangible personal property (physical goods): Yes
• Prepared food and beverages: Yes (full rate)
• Unprepared food/groceries: Yes at reduced rate (4% state + local)
• SaaS: Taxable in Tennessee (unlike many states)
• Digital products: Taxable in Tennessee
• Most services: Not taxable (significant exceptions exist)

Tennessee taxes SaaS and digital products — this is notable for tech companies. Many states exempt these; Tennessee does not.

Economic Nexus

Remote sellers with $100,000+ in Tennessee sales must collect Tennessee sales tax.

FAQ

Is Tennessee's sales tax really up to 9.75%?

Yes. Some jurisdictions (like Memphis/Shelby County) hit the 9.75% combined maximum. This is among the highest in the U.S.

Is food taxed?

Yes, but at a reduced 4% state rate (vs 7% for other goods). Local additions still apply. Tennessee is one of few states that taxes groceries (though at a reduced rate).

Is SaaS taxable?

Yes. Tennessee specifically taxes SaaS (software as a service) as tangible personal property. This affects tech LLCs offering subscription software.