Minimum Sales Rate Tax for 2024
| 7% | Column content | Column content | Column content | Column content | |
| 0.5% | Column content | Column content | Column content | Column content | |
| 2.25% | Column content | Column content | Column content | Column content | |
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| Scientific & Cultural Fac.(cd) | Column content | Column content | Column content | Column content | |
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| Minimum combined sales tax rate value | 9.75% | Column content | Column content | Column content | Column content |
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| Economic sales nexus threshold | $100,000 | Column content | Column content | Column content | Column content |
| Transactions threshold | N/A | Column content | Column content | Column content | Column content |
| Sales tax return filing due date | 20th day of the month following the reporting period | Column content | Column content | Column content | Column content |
The base state sales tax rate in Tennessee is 7.0%, but since the Shelby County tax rate is 2.25% and the city-specific tax is 0.5%, the minimum sales tax rate for Memphis is 9.75%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Looking for help calculating your sales tax? Contact us today to book a free consultation!
What is nexus?
In Memphis, businesses must understand “nexus” to determine their tax obligations. Nexus refers to the connection that requires a business to collect sales tax in a state. This concept became even more important after the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., which allowed states to require sales tax collection based on economic activity rather than just a physical presence.
Specific sales tax rules for Memphis
Tennessee has special tax rates for various items. Manufactured homes are taxed at 3.5%, while food is taxed at 4%, and aviation fuel at 4.25%. Manufacturers benefit from reduced rates, paying 1% for industrial water and 1.5% for energy fuel and electricity used in data centers. Telecommunications for businesses are taxed at 7.5%, and hemp-derived cannabinoids at 6%. Cable TV and satellite services are both taxed at 8.25%, and qualified common carriers pay 3.75% on out-of-state property purchases.
Services
Most services are subject to sale tax.
Goods
Items, such as appliances, vehicles, furniture, sporting goods, and electronics, are taxed
Clothing
Clothing is taxable unless there is a tax holiday
Electronics
Taxable
SaaS
Taxed
Digital Products
Mostly taxable
Software
Pre-written and custom software are both taxed
Freight/Shipping
Generally not subject to sales tax.
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