Memphis, Tennessee Sales Tax Rate

The Memphis combined sales tax rate is 9.750%. This includes the Tennessee state sales tax rate of 7.000% plus applicable local option taxes for the transaction address.

For companies delivering orders here, staying updated on the current memphis tax rates prevents costly billing errors. Tennessee sales tax is administered by the Tennessee Department of Revenue. The state levies a base rate of 7%, and local jurisdictions add their own taxes, bringing the average combined rate to 9.61%. The state uses a mixed sourcing model: Local sellers source to origin, while out-of-state sellers source to destination.

Under Tennessee sourcing rules, sales delivered to an address inside Memphis generally use the Memphis combined rate, but businesses should verify address-level rates before compliance or filing decisions.

Whether you are writing an invoice or auditing receipts in Memphis, calculating the tax involves multiplying the purchase price by the local tax percentage. The general formula is:

To find the total checkout price including sales tax, use the total price formula:

If you are using this page as a memphis sales tax calculator, our interface handles the combined rate automatically.

For a worked example, suppose you purchase a taxable electronic device in Memphis for $150.00. Using the 2026 combined tax rate of 9.750% (which is expressed as the decimal coefficient 0.09750):

By applying this arithmetic model, the total sales tax collected is $14.63, making the final checkout total $164.63.

For ordinary retail purchases, this calculator gives a simple estimate. For vehicles, exempt purchases, business equipment, or unusual transactions, verify the correct state treatment before relying on a simple percentage calculation.

Not all goods and services are subject to the combined 9.750% rate. Tax rules in Tennessee offer several key exemptions and reductions, where buyers may qualify for a specific sales tax exemption under state guidelines. Understanding whether a product is classified as tangible personal property or a non-taxable service is crucial:

• Groceries & Food: Tennessee taxes groceries at a reduced rate of 4.00% plus any applicable local tax rates. Prepared foods sold at restaurants are generally taxable at the full combined rate of 9.750%.
• Prescription Medications: Prescription drugs are fully exempt from sales tax in Tennessee when prescribed by a licensed medical practitioner.
• Software, SaaS & Digital Goods: Fully taxable as a telecommunications or software service.
• Prepared Foods & Restaurants: Dining at restaurants or buying prepared hot meals is generally taxable at the full combined rate of 9.750%.

Online merchants delivering goods to customers in Memphis must navigate economic presence laws introduced after recent legal changes. Following the South Dakota v. Wayfair Supreme Court decision, remote sellers are required to collect sales tax on shipments to customers if they exceed economic nexus limits.

In Tennessee, the economic nexus threshold is defined below. Once a business crosses these thresholds, they must register to collect and remit sales taxes to the state Department of Revenue. Failure to properly remit sales tax or calculate regional rates can result in severe audit assessments, interest, and penalties on local tax collections.

Audit & Compliance Warning: Because combined tax rates combine state and local tax components, calculating tax based purely on ZIP codes can lead to errors. Many ZIP codes span multiple municipal boundaries with differing rates. For precise auditing, always use address-level geo-lookup.

If you run a business or make out-of-state purchases in Memphis, you must understand the difference between sales and use tax. While sales tax is collected directly by registered vendors at the point of sale, use tax is a self-assessed tax. It applies when taxable goods or services are purchased for use, storage, or consumption in Memphis from a vendor who did not collect sales tax (such as an out-of-state online retailer that doesn't have sales tax nexus in Tennessee).

Crucially, the sales tax and use tax rates for Memphis are identical at 9.750%. If you purchase equipment, software licenses, or office supplies online and the merchant does not charge tax, you or your business are legally obligated to report and pay the matching use tax directly to the Tennessee Department of Revenue.

For consumers, use tax is typically reported and paid annually on their state individual income tax returns. For businesses, use tax is audited heavily, and failure to accrue use tax on untaxed out-of-state vendor invoices is one of the most common causes of multi-thousand dollar audit assessments.

Businesses selling taxable goods or services in Memphis may need to register with Tennessee Department of Revenue if they have physical presence or exceed economic nexus thresholds in Tennessee. For full registration, filing, exemption certificate, and audit guidance, see the Tennessee sales tax guide.

To survive audit reviews in Memphis, businesses must keep organized exemption documentation and transaction records. If you sell wholesale goods to buyers who intend to resell them, you may not need to charge sales tax — but you must obtain a valid resale certificate from the buyer at the time of transaction. For full audit preparation and record-keeping guidance, see the Tennessee sales tax page.