Minimum Sales Rate Tax for 2024
| 7% | Column content | Column content | Column content | Column content | |
| 0% | Column content | Column content | Column content | Column content | |
| 2.25% | Column content | Column content | Column content | Column content | |
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| Rtd Greater Denver | Column content | Column content | Column content | Column content | |
| Scientific & Cultural Fac.(cd) | Column content | Column content | Column content | Column content | |
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| Minimum combined sales tax rate value | 9.25% | 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 Davidson County tax rate is 2.25% and the city-specific tax is 0%, the minimum sales tax rate for Nashville is 9.25%.
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 Nashville, 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 Nashville
Tennessee applies special state tax rates to specific goods and services. Food and food ingredients are taxed at 4.0%, while aviation fuel has a 4.25% rate. Industrial water and energy fuel for manufacturers are taxed at reduced rates of 1.0% and 1.5%, respectively. Electricity used by qualified data centers is also taxed at 1.5%. Interstate and international telecommunications sold to businesses are subject to a 7.5% tax. Manufactured homes are taxed at half the general state tax rate, amounting to 3.5%. Video programming services, such as cable TV charges between $15.01 and $27.50, and direct-to-home satellite television services are both taxed at 8.25%. Qualified common carriers pay a 3.75% use tax on tangible property used outside Tennessee, while hemp-derived cannabinoids are taxed at 6.0%.
Services
Some services are taxable.
Goods
Most items, such as appliances, vehicles, furniture, sporting goods, and electronics, are taxable
Clothing
All clothing is taxable unless there is a tax holiday
Electronics
Taxable
SaaS
Taxable
Digital Products
Generally taxable except for digital photographs
Software
Pre-written and custom software is taxable.
Freight/Shipping
Generally not taxable.
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