2024 Guide to Sales Tax in Nashville, Tennessee
- Tennessee Sales Tax Rate
- 7%
- Davidson County Sales Tax Rate
- 2.25%
- Special Sales Tax Rate
- 0%
- Nashville Sales Tax Rate
- 0%
For businesses selling to customers in Nashville or Davidson County, understanding local sales tax regulations is essential. This guide provides a comprehensive overview of sales tax in Nashville, Tennessee.
We’ll explain the differences between state, county, and city sales tax rates, how to calculate sales tax in Nashville, and whether your business needs to collect sales tax. Additionally, we’ll provide the sales tax rates for the top 10 most populated zip codes in Nashville and offer tips to ensure you remain compliant with sales tax regulations.
What is the Sales Tax in Nashville?
Nashville has a combined sales tax rate of 9.25%. The breakdown is as follows:
- The Tennessee state sales tax rate: 7.00%
- A Davidson County sales tax rate: 2.25%
- Nashville city sales tax rate: 0.00%
- Special sales tax rates: 0.00%
What is Davidson County Sales Tax?
Davidson County imposes a sales tax rate of 2.25%, which is added to the state rate. This makes the total sales tax rate in Nashville 9.25%.
Tax Rates in Nashville, Tennessee
Curious about the variation in sales tax rates in Nashville? Here’s a breakdown of the sales tax rates for the top 10 zip codes in Nashville:
Zip Code | State Sales Tax | County Sales Tax | City Sales Tax | Special Sales Tax |
---|---|---|---|---|
37205 | 7.00% | 2.25% | 0.00% | 0.00% |
37206 | 7.00% | 2.25% | 0.00% | 0.00% |
37207 | 7.00% | 2.25% | 0.00% | 0.00% |
37209 | 7.00% | 2.25% | 0.00% | 0.00% |
37211 | 7.00% | 2.25% | 0.00% | 0.00% |
37212 | 7.00% | 2.25% | 0.00% | 0.00% |
37214 | 7.00% | 2.25% | 0.00% | 0.00% |
37215 | 7.00% | 2.25% | 0.00% | 0.00% |
37217 | 7.00% | 2.25% | 0.00% | 0.00% |
37221 | 7.00% | 2.25% | 0.00% | 0.00% |
Other Tax Rates for Nashville
In addition to the main tax rates, here are some other tax rates that might apply to your business in Nashville:
Type of Sales Tax | Rate |
---|---|
Non-Nexus Sellers – State Use Tax | 7.00% |
Non-Nexus Sellers – County Use Tax | 2.25% |
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 | 2.25% |
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 | 2.25% |
Marketplace Facilitators – City Sales Tax | 0.00% |
Marketplace Facilitators – Special Sales Tax | 0.00% |
What Items are Taxable in Nashville?
In Tennessee, not all items are subject to sales tax. For example, certain groceries and medical products may be exempt. To ensure you’re charging the correct tax, consider adding a Tax Information Code (TIC) to each item you sell. A TIC is a unique identifier that categorizes goods or services.
Here are some examples of taxable items in Nashville:
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 Nashville?
Tennessee exempts several items from sales tax to encourage their purchase or because they are deemed essential. To avoid mistakenly charging tax on exempt items, apply a Tax Information Code (TIC) to each of these products.
Here is a list of some tax-exempt items in Nashville:
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 Nashville?
Businesses must collect sales tax in Nashville if they have either a physical presence (nexus) or an economic nexus in Tennessee.
What is Physical Nexus in Tennessee?
Physical nexus in Tennessee means that your business has some kind of physical presence in the state. This can include having an office, warehouse, employees, or a significant amount of inventory within the state.
What is Economic Nexus in Tennessee?
If your business doesn’t have a physical presence in Tennessee, you can still be required to collect sales tax if you exceed the economic nexus threshold. This is defined as making $100,000 in sales or 200 transactions in the state within a year.
How you qualify for economic nexus in Tennessee (full details):
- Count all sales into Tennessee, including wholesale transactions, toward your $100,000 sales threshold or 200 transactions.
- Sales made through a marketplace where the facilitator collects tax on your behalf do not count toward the threshold.
- Once you reach the threshold, you must register for sales tax in Tennessee and begin collecting and remitting the appropriate taxes.
How to Get a Sales Tax Permit in Nashville?
If your business meets the physical or economic nexus criteria, you’ll need to obtain a sales tax permit in Tennessee. This process is simple and free.
Here are the steps:
- Visit the Tennessee Department of Revenue website.
- Complete the online registration form with details about your business.
- The system will identify the necessary permits and register you for them.
- You’re all set!
For more information, refer to the Tennessee Department of Revenue’s Sales Tax website.
How Do You Charge the Right Amount for Sales Tax in Nashville?
Ensuring you charge the correct sales tax in Nashville can be challenging due to potential rate changes and differing rates across regions. Here’s how to stay compliant:
- Manually update rates: Keep track of changes by regularly checking the Tennessee Department of Revenue’s website. This approach requires updating your ecommerce platform frequently to ensure accurate tax rates.
- Use sales tax software: Automate the process with sales tax compliance software like TaxCloud. These tools update rates automatically across all jurisdictions, saving you time and reducing errors.
How Do You File and Remit Sales Tax in Nashville?
Do you need to file sales tax returns specifically for the city of Nashville or Davidson County? No, you don’t. If you have sales tax nexus in Tennessee, you collect sales taxes from across the state and file a single state-wide return. The Tennessee Department of Revenue will process the returns.
If filing Tennessee sales taxes is time-consuming for you, TaxCloud can help. Our platform automates the entire sales tax management process, from tracking nexus and registering for sales tax to filing returns. With TaxCloud, you can focus on growing your business while we handle your sales tax compliance.
Learn how TaxCloud can simplify sales tax for your business.
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