Whether you live in Memphis or are just visiting, you might be curious about how the city's sales tax works. Total sales tax is comprised of both a state tax and a county tax, but 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 a 7% state tax and a 2.25% county tax for a total of 9.25%, or an additional $46.25.
- If you go to Kroger and purchase eggs, milk, produce, meat, and other food items totaling $50, you'll pay a 5.5% state tax and a 2.25% county tax for a total of 7.75%, or an additional $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 both state and county taxes for the food and a total of 9.25% in taxes for the non-food items for a grand total of $4.80 additional.
- Finally, let's say you go to Best Buy and buy a computer for $2,000. You will pay a 7% state tax and a 2.75% county tax for a total of 9.75%, or an additional $195.
There are a few further taxes to be aware of, depending on purchases you make. If you stay in a hotel, you will pay a special hotel tax of 14.25 percent (7% state sales tax + 2.25% local sales tax + an additional 5%).
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, as well as a complete list of all state and local taxes, on the Memphis Chamber of Commerce website.
Interestingly, in the state of Tennessee, there are no state taxes on property or on personal income.
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 of July to 11:59 p.m. that following Sunday. During this weekend, only certain purchases are eligible for tax exemption. Those items include clothing and school supplies from $100 or less and computers $1,500 or less.