2024 Guide to Sales Tax in Memphis, Tennessee
- Tennessee Sales Tax
- 7%
- Shelby County Sales Tax
- 2.25% or 0%
- Special Sales Tax
- 0%
- Memphis Sales Tax
- 0%
Operating a business in Memphis or Shelby County? It's crucial to understand local sales tax regulations to ensure compliance. This guide provides a comprehensive overview of sales tax in Memphis, Tennessee.
We'll cover the different sales tax rates at the state, county, and city levels, how to calculate sales tax in Memphis, and the requirements for businesses to collect sales tax. Additionally, we provide sales tax rates for the top 10 most populated zip codes in Memphis and tips to ensure compliance with sales tax regulations.
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:
Zip Code | State Sales Tax | County Sales Tax | City Sales Tax | Special Sales Tax |
---|---|---|---|---|
38111 | 7.00% | 0.00% | 2.75% | 0.00% |
38115 | 7.00% | 0.00% | 2.75% | 0.00% |
38109 | 7.00% | 2.25% | 0.00% | 0.00% |
38116 | 7.00% | 2.25% | 0.00% | 0.00% |
38118 | 7.00% | 2.25% | 0.00% | 0.00% |
38125 | 7.00% | 2.25% | 0.00% | 0.00% |
38127 | 7.00% | 2.25% | 0.00% | 0.00% |
38128 | 7.00% | 2.25% | 0.00% | 0.00% |
38134 | 7.00% | 2.25% | 0.00% | 0.00% |
38135 | 7.00% | 2.25% | 0.00% | 0.00% |
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:
Type of Sales Tax | Rate |
---|---|
Non-Nexus Sellers – State Use Tax | 7.00% |
Non-Nexus Sellers – County Use Tax | Varies |
Non-Nexus Sellers – City Use Tax | 0.00% |
Non-Nexus Sellers – Special Use Tax | 0.00% |
Out-of-State Sellers – State Use Tax | 7.00% |
Out-of-State Sellers – County Use Tax | Varies |
Out-of-State Sellers – City Use Tax | 0.00% |
Out-of-State Sellers – Special Use Tax | 0.00% |
Marketplace Facilitators – State Sales Tax | 7.00% |
Marketplace Facilitators – County Sales Tax | Varies |
Marketplace Facilitators – City Sales Tax | 0.00% |
Marketplace Facilitators – Special Sales Tax | 0.00% |
What Items are Taxable in Memphis?
In Tennessee, certain items are taxable while others are exempt. Common taxable items include:
Item | Description | TIC Number |
---|---|---|
Apparel | Clothing and footwear | 10010 |
Electronics | Computers and accessories | 20010 |
Furniture | Home furnishings | 30010 |
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:
Item | Description | TIC Number |
---|---|---|
Prescription Drugs | Medications | 40010 |
Groceries | Unprepared food items | 50010 |
Medical Equipment | Durable medical equipment | 60010 |
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:
- Visit the Tennessee Department of Revenue website.
- Complete the application for a sales tax permit.
- 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:
- Collect sales tax from customers.
- File your sales tax return online.
- 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.
Sales Tax Guides by State
Our sales tax guides provide an overview of sales tax rates, nexus thresholds, taxable and nontaxable items, along with other valuable tax knowledge for every U.S. state.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming