2024 Guide to Sales Tax in Memphis, Tennessee

What is the Sales Tax in Memphis?

The total sales tax rate in Memphis combines state and local taxes. Memphis has a combined sales tax rate that includes Tennessee’s state tax and Shelby County’s additional rates.

Breakdown of Sales Tax in Memphis

• State Sales Tax: 7.00%
• County Sales Tax: Varies (2.25% or 0.00% depending on the zip code)
• City Sales Tax: 0.00%
• Special Sales Tax: 0.00%

What is Shelby County Sales Tax?

Shelby County’s sales tax rate varies depending on the zip code, either adding 2.25% to the state rate or none at all.

Tax Rates in Memphis, Tennessee

Here are the sales tax rates for the top 10 most populated zip codes in Memphis:

Other Tax Rates for Memphis

We’ve now shared the main tax rates for Memphis. Here are some other tax rates that might apply to your business in Tennessee:

What Items are Taxable in Memphis?

In Tennessee, certain items are taxable while others are exempt. Common taxable items include:

What Items are Exempt from Taxes in Memphis?

Some items are exempt from sales tax in Tennessee, typically for essential goods or to encourage certain purchases:

Who Needs to Collect Sales Tax in Memphis?

In Memphis, businesses need to collect sales tax if they have either physical or economic nexus in Tennessee.

Physical Nexus

You have a physical presence in Tennessee if you:

• Own or lease property in Tennessee
• Have employees in Tennessee
• Maintain inventory in Tennessee

Economic Nexus

You have economic nexus if your sales into Tennessee exceed $100,000 or 200 transactions in the current or previous calendar year.

How to Get a Sales Tax Permit in Memphis?

If you meet the nexus requirements, you must register for a sales tax permit in Tennessee. Here’s how:

1. Visit the Tennessee Department of Revenue website.
2. Complete the application for a sales tax permit.
3. Submit the application and await approval.

How Do You Charge the Right Amount for Sales Tax in Memphis?

Ensuring you charge the correct sales tax involves:

• Manually checking and updating rates: Regularly check the Tennessee Department of Revenue website for updates.
• Using sales tax software: Implement software like TaxCloud to automate rate updates and compliance.

How Do You File and Remit Sales Tax in Memphis?

Sales tax returns are filed with the Tennessee Department of Revenue. Here’s how:

1. Collect sales tax from customers.
2. File your sales tax return online.
3. Remit the collected taxes to the state.

Conclusion

Understanding and complying with sales tax regulations in Memphis is essential for any business operating in Tennessee. Use this guide to navigate the complexities of sales tax and ensure your business remains compliant.