Tennessee sales tax on invoices (2026 guide)

Tennessee's general state sales tax rate is 7%. Counties and cities add a local option tax of 1.5% to 2.75%, so most taxable sales are taxed at between 8.5% and 9.75% in total.

Tennessee also has a rule you won't find in most states: the single-article rules. On expensive individual items, local tax stops at $1,600 of the price, and a separate state single-article tax applies to the next $1,600. If you sell equipment, furniture or anything else priced above $1,600 an item, your invoice math changes.

Tennessee sales tax rates

A few products have different state rates — food and food ingredients, for example, are taxed at 4% — but the 7% general rate covers most goods and taxable services. The Department of Revenue publishes local rate charts and lookup tools, and the local sales and use tax rates in a given location are the same.

How the single-article rules work

The Department of Revenue's manual describes two rules that apply to each single article of tangible personal property — an item that's a separate unit by common understanding, not a set or lot:

1. Local tax cap: local tax applies only to the first $1,600 of the item's price. Two counties have lower caps: Hamblen County ($300) and Hancock County ($375). The city of Morristown uses $1,600.
2. State single-article tax: an extra 2.75% state tax applies to the portion of the item's price between $1,600 and $3,200. Nothing above $3,200 is subject to it.

The general 7% state tax still applies to the full price. The cap works item by item — it doesn't apply to an invoice total made up of several items — and it doesn't apply at all to taxable services, amusements, custom computer software, or warranty and maintenance contracts, which pay the full local rate.

Which services are taxable in Tennessee?

Tennessee taxes all tangible personal property unless it's exempt, but services are taxable only if the law lists them (or they're part of the price of a taxable item). The listed services include:

• Repair of tangible personal property or computer software — including service calls where repair is done or contemplated, hourly or flat rates and mileage.
• Installation of tangible personal property or computer software.
• Cleaning tangible personal property, and animal bathing.
• Lodging services and rooms.
• Parking and storing of motor vehicles.
• Telecommunication and television programming services.
• Short-term space rental to vendors without a permanent location.

Labor performed on real property generally isn't subject to sales tax. And services not on the list — most consulting, design and writing — aren't taxable on their own.

Repair shops: charges for repair services are taxable even when no new parts are used. A trip or mileage charge just for giving an estimate, where no repair is contemplated, isn't. See our auto repair invoice template.

Registering for Tennessee sales tax

Anyone who sells, rents or leases tangible personal property or provides taxable services in Tennessee must get a Certificate of Registration from the Department of Revenue before doing business. You register online through the Tennessee Taxpayer Access Point (TNTAP), and a business with more than one location needs a certificate for each one. All sales and use tax returns and payments are filed electronically through TNTAP.

Remote sellers: an out-of-state business with no physical presence must register once its sales into Tennessee exceed $100,000 during the previous 12-month period. It must start collecting on the first day of the third month after the month it meets the threshold.

What a Tennessee sales tax invoice should show

• your business name and address,
• the customer's name and address,
• a unique invoice number and the invoice date,
• a description and price for each item or service — one line per single article so the cap can be applied,
• sales tax as a separate line (or lines for state, single-article and local tax), and
• the total due.

Put taxable services on their own lines: they take the full local rate even when the goods on the same invoice are capped.

Resale and exemption certificates

Any sale for resale without a fully completed resale certificate is treated as a retail sale, and you're liable for the tax. To buy for resale tax-free, a purchaser can give you:

• a Tennessee Blanket Certificate of Resale issued by the Department,
• a Streamlined Sales Tax Certificate of Exemption,
• the Multistate Tax Commission Uniform Sales and Use Tax Certificate, or
• another state's resale certificate (out-of-state dealers only).

The two multistate certificates must include the buyer's Tennessee sales tax number or one issued by another state. Keep certificates with your records and make them available to the Department on request — dealers must keep records for at least three years from December 31 of the year the related return was filed. See how to invoice a tax-exempt customer.

A worked example

Say you sell and repair outdoor power equipment in a county with a 2.25% local rate (a hypothetical rate for this example). One invoice includes:

• a $2,400 riding mower (a single article), and
• $300 to repair the customer's old trimmer.

For the mower:

• state tax: $2,400 × 7% = $168.00
• state single-article tax: ($2,400 − $1,600) × 2.75% = $800 × 2.75% = $22.00
• local tax, capped: $1,600 × 2.25% = $36.00

For the repair, a taxable service, the cap doesn't apply: $300 × (7% + 2.25%) = $300 × 9.25% = $27.75.

Total tax is $168.00 + $22.00 + $36.00 + $27.75 = $253.75, and the invoice total is $2,700 + $253.75 = $2,953.75.

Selling to customers in other states

The Department says that, since July 1, 2024, repairs done at a Tennessee location are not sourced to Tennessee when you deliver the repaired item to the customer outside the state. More broadly, if you ship goods or deliver taxable services into another state, that state's rules may apply. Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to register once sales pass a threshold the state sets — check each state's rules and use its rate.

Common mistakes on Tennessee invoices

• Applying local tax to the full price of an expensive item instead of the first $1,600 (or $300 / $375 in Hamblen and Hancock counties).
• Forgetting the 2.75% state single-article tax on the $1,600–$3,200 slice.
• Capping local tax on services — repairs, installation and other taxable services pay the full local rate.
• Applying the cap to the invoice total instead of each single article.
• Accepting a sale for resale without a completed certificate.

Our sales tax calculator handles the simple cases; work single articles line by line.

Quick checklist for Tennessee invoices

• ✅ Certificate of Registration through TNTAP for each location
• ✅ Checked whether your service is on Tennessee's taxable list
• ✅ 7% state plus the local rate for the location
• ✅ Single-article cap and 2.75% state single-article tax applied item by item
• ✅ Resale certificates on file, records kept at least three years