If you sell goods or services in Tennessee, you may be required to collect sales tax on those transactions. Tennessee Sales Tax is 7 percent, and local taxes can add another 0 to 3 percent. You can find more information about how sales tax works in Tennessee by visiting the state’s Department of Revenue website.
If your business meets the criteria for nexus in Tennessee (which includes having a physical presence there, such as a store, office, warehouse, or storage facility), you must register to collect sales tax, charge the correct rate on all taxable purchases, and file returns and remit the collected amount on time. Failure to do so can result in penalties and interest charges.
Some goods and services are exempt from Tennessee sales tax, including machinery, agricultural equipment, fuel, and medical supplies. Other exempt customers include government agencies and nonprofit organizations. Reading the Tennessee Sales Tax Guide, you can find more information about which goods and services are taxable in Tennessee. The guide also details how sales tax applies to marketplace sellers, including those using Fulfillment by Amazon.
How to Pay Tennessee Sales Tax?
If your business sells to customers in Tennessee, you must collect sales tax from those customers and remit it to the state. If you’re not collecting sales tax, you may be subject to an investigation by the Department of Revenue. It’s important to familiarize yourself with Tennessee sales tax laws and consult a tax professional as needed.
First, you must register your business with the Department of Revenue. This process is usually simple, but it’s essential to check with each state’s department of revenue to determine the exact requirements. Tennessee is a destination-based sales tax state, which means that you must charge sales tax based on the buyer’s location.
After registering, you must file returns and remit payments online through the Tennessee Department of Revenue’s TNTAP portal. The department recommends that businesses file monthly, but they can choose to file quarterly or annually instead. It is also recommended that you make electronic sales tax payments. This is typically faster than filing and paying by mail. If you do not make your sales tax payments on time, the state will begin to accrue interest.
Tennessee Sales Tax Due Dates
Tennessee’s sales tax filing and payment due dates are generally the 20th of the month following the reporting period. However, these deadlines may be adjusted for holidays and weekends. In addition, if a return is filed late, a failure-to-file penalty and interest charges will apply to the unpaid balance.
Vending machines that are operated for the benefit of a charitable nonprofit organization are not subject to sales tax, but the business must still pay gross receipts tax on the merchandise sold in the machine. This tax is due quarterly on November, February, May, and August.