Whether you live in Memphis or are just visiting, you might be curious about how sales tax in Memphis works. Total sales tax is comprised of both a state tax and a county tax. Then, it can differ from one item to another. Here is how to calculate Tennessee sales tax:
The Tennessee state sales tax on merchandise is 7 percent (7.0%).
The Tennessee state tax on non-restaurant food is 5.5 percent (5.5%).
In Shelby County and within Memphis City Limits, there is an additional sales tax of 2.25 percent (2.25%). If you make a purchase in one of the surrounding cities - Arlington, Bartlett, Collierville, Germantown, Lakeland, or Millington, that sales tax is instead 2.75 percent (2.75%).
In order to calculate your total sales tax, you’ll need to add the state taxes to the county taxes.
If you go to Walmart and purchase a T.V. that costs $500, you'll pay 7% in state taxes and 2.25% in county taxes for a total of 9.25% or $46.25.
If you go to Kroger and purchase eggs, milk, produce, meat, and other food items totaling $50, you'll pay 5.5% in state taxes and 2.25% in county taxes for a total of 7.75% or $3.88.
Now let's say you go to Target and buy $50 in food items and $10 in non-food items. You will pay a total of 7.75% in taxes for the food and a total of 9.25% in taxes for the non-food items for a grand total of $4.80.
Finally, let's say you go to Best Buy and buy a computer for $2,000. You will pay 7% in state taxes and another 2.75% in county taxes for a total of 9.75% or $195.
There are a few additional taxes depending on the purchases you make. If you stay in a hotel you will pay a special hotel tax of 14.25 percent (which is the 7% state sales tax + 2.25% local sales tax + an additional 5 percent).
If you purchase property in Memphis, Shelby County, or a Shelby County municipality, you will be responsible for a property tax. The current rate in Shelby County is $4.37 per $100 of property value. You can find more information on property taxes on the Memphis Chamber of Commerce website.
Tennessee Tax Free Weekend
Every year, there is a Tennessee sales tax holiday, commonly referred to as “Tax-Free Weekend”.
The holiday is always from 12:01 a.m. on the final Friday in July to 11:59 p.m. on that following Sunday. In 2016, the Tennessee sales tax holiday was from July 29 to July 31. In 2017, the Tennessee sales tax holiday was July 28 to July 30.
In 2018, the Tennessee sales tax holiday will be July 27 to July 29.
During this weekend, only certain purchases are eligible to be exempt from the sales tax. Those items include clothing and school supplies from $100 or less, and computers $1,500 or less.
As a side note, in the state of Tennessee, there are no state taxes on property or personal income.
For a complete list of all state and local taxes, visit the Memphis Chamber of Commerce website.
Updated by Holly Whitfield, December 2017.