If you’re buying or selling furniture in the Volunteer State, understanding TN sales tax on furniture is more than a formality—it’s a financial necessity. Tennessee has one of the highest combined sales tax rates in the country, and furniture is nearly always taxable. That means every couch, table, or bedroom set comes with added tax layers that vary by location.
For sellers, failing to collect the right amount can lead to audits and penalties. For buyers, the sticker shock can be real. That’s where Hands Off Sales Tax (HOST) steps in—to help businesses navigate this maze with confidence and compliance.
Understanding Tennessee’s State Sales Tax
Navigating Tennessee’s sales tax system is crucial for both buyers and sellers of furniture. Let’s break down the essentials.
Tennessee imposes a state sales tax rate of 7% on most tangible personal property, including furniture. This rate is among the highest state-level sales taxes in the United States.
In Tennessee, tangible personal property refers to physical items that can be touched and moved. Furniture, such as sofas, tables, and chairs, falls into this category and is therefore subject to the state’s sales tax.
Local Sales Tax Variations in Tennessee
Local jurisdictions—counties and cities—have the authority to impose additional sales taxes. These local rates can significantly affect the total sales tax paid on furniture purchases, varying across the state.
Counties and cities in Tennessee can levy local sales taxes, with rates ranging from 1.5% to 2.75%. The combined state and local sales tax rate cannot exceed 10%.
- Nashville (Davidson County): As of February 1, 2025, the total sales tax rate is 9.75%, comprising the 7% state tax and a 2.75% county tax.
- Chattanooga (Hamilton County): The total sales tax rate is 9.25%, with the state tax at 7% and a county tax of 2.25%.
- Knoxville (Knox County): The combined sales tax rate is 9.25%, including the 7% state tax and a 2.25% county tax.
Practical Examples of Sales Tax Calculations for Furniture Sales in Tennessee
Below are illustrative examples demonstrating how combined state and local sales tax rates affect the total cost of furniture in different Tennessee locations.
Example 1: Nashville (Davidson County)
Effective February 1, 2025, Nashville’s total sales tax rate is 9.75%, comprising the state rate of 7% and a local rate of 2.75%.
- Scenario: A customer purchases a sofa priced at $1,000.
- Calculation:
- State tax: $1,000 × 7% = $70
- Local tax: $1,000 × 2.75% = $27.50
- Total sales tax: $70 + $27.50 = $97.50
- Total cost: $1,000 + $97.50 = $1,097.50
Example 2: Chattanooga (Hamilton County)
Chattanooga’s total sales tax rate is 9.25%, with the state rate at 7% and the county rate at 2.25%.
- Scenario: A customer purchases a dining table priced at $800.
- Calculation:
- State tax: $800 × 7% = $56
- Local tax: $800 × 2.25% = $18
- Total sales tax: $56 + $18 = $74
- Total cost: $800 + $74 = $874
Example 3: Knoxville (Knox County)
Knoxville’s combined sales tax rate is 9.25%, including the 7% state tax and a 2.25% county tax.
- Scenario: A customer purchases a bed frame priced at $500.
- Calculation:
- State tax: $500 × 7% = $35
- Local tax: $500 × 2.25% = $11.25
- Total sales tax: $35 + $11.25 = $46.25
- Total cost: $500 + $46.25 = $546.25
By understanding and applying the correct combined sales tax rates, individuals and businesses can navigate Tennessee’s tax landscape more effectively, ensuring accurate pricing and compliance with state and local tax laws.
Use Tax Implications
When purchasing furniture from out-of-state sellers who don’t collect Tennessee sales tax, it’s essential to understand the state’s use tax obligations to ensure compliance and avoid potential penalties.
What Is Use Tax?
Use tax serves as a counterpart to sales tax, applying to taxable goods brought into Tennessee when sales tax hasn’t been collected by the seller. This ensures that in-state and out-of-state purchases are taxed equally, preventing unfair competition. The use tax rate mirrors the combined state and local sales tax rates applicable at the purchaser’s location.
When Does Use Tax Apply?
Use tax is typically due in scenarios such as:
- Out-of-State Purchases: Buying furniture from an out-of-state retailer who doesn’t collect Tennessee sales tax and having it shipped into Tennessee.
- Online or Catalog Orders: Ordering furniture online or from a catalog where the seller doesn’t charge Tennessee sales tax.
- Personal Transport: Purchasing furniture in another state without paying that state’s sales tax and bringing it into Tennessee for use.
In these cases, the buyer is responsible for remitting the appropriate use tax to the Tennessee Department of Revenue.
Buyer Responsibilities
Tennessee residents and businesses must:
- Calculate the Tax: Determine the use tax based on the purchase price and the combined state and local tax rates.
- Report the Tax: File the use tax using the Tennessee Department of Revenue’s online system or appropriate forms.
- Pay the Tax: Remit the calculated tax by the due date to avoid interest and penalties.
By fulfilling these obligations, buyers ensure compliance with Tennessee tax laws and contribute fairly to state and local revenues.
Exemptions and Special Considerations
Navigating Tennessee’s sales tax regulations is essential for both buyers and sellers of furniture. While most furniture sales are subject to sales tax, certain exemptions and considerations can impact tax obligations.
Exemptions Relevant to Furniture Sales
Generally, furniture sales in Tennessee are taxable. However, specific exemptions may apply:
- Natural Disaster Relief: Individuals replacing furniture damaged or destroyed in a natural disaster occurring in Tennessee may be eligible for a refund of sales tax paid on qualifying purchases. The refund applies to items with a sales price of $3,200 or less, with a maximum refund of $2,500 per residence.
Resale Certificates for Businesses
Businesses purchasing furniture for resale can utilize a resale certificate to buy items tax-free. This certificate confirms that the purchased goods are intended for resale, and sales tax will be collected from the end consumer. To obtain and use a resale certificate:
- Access Your Certificate: Log into the Tennessee Taxpayer Access Point (TNTAP). Click the “More…” tab. Click “Print Certificate.” Select the certificate. Click “Print.”
- Provide to Suppliers: Present the certificate to suppliers at the time of purchase to avoid paying sales tax.
Misuse of a resale certificate, such as using it to purchase items not intended for resale, can result in tax liabilities and penalties.
Tax Obligations for Used vs. New Furniture
The taxability of furniture in Tennessee is generally consistent regardless of whether the item is new or used. Both are considered tangible personal property and are subject to sales tax when sold at retail. However, casual and isolated sales—such as an individual selling used furniture at a garage sale—may be exempt if they occur infrequently. Specifically, irregular sales or sales made only during a temporary sales period occurring on a semiannual or less frequent basis are considered casual and isolated, and not subject to tax.
Understanding these exemptions and special considerations ensures compliance with Tennessee’s tax laws and can lead to significant savings for both buyers and sellers in the furniture market.
Compliance for Sellers
Ensuring compliance with Tennessee’s sales tax laws is vital for furniture sellers to operate legally and avoid penalties. This involves registering for a sales tax license, accurately collecting and remitting taxes, and maintaining meticulous records.
Registering for a Tennessee Sales Tax License
Before initiating sales, sellers must obtain a Sales and Use Tax Account. This can be accomplished online through the Tennessee Taxpayer Access Point (TNTAP):
- Access TNTAP: Visit the Tennessee Department of Revenue’s TNTAP portal.
- Initiate Registration: Click on “Register a New Business” and follow the prompts to complete the application.
- Receive Confirmation: Upon successful registration, you’ll receive a Certificate of Registration to display at your business location.
There is no fee for registering a sales and use tax account in Tennessee.
Collecting, Reporting, and Remitting Sales Tax
Once registered, sellers are responsible for:
- Collecting Sales Tax: Charge the appropriate state and local sales tax rates on all taxable furniture sales. Tennessee’s state sales tax rate is 7%, with local rates varying by county and city.
- Reporting Sales Tax: File sales tax returns electronically via TNTAP. Filing frequency (monthly, quarterly, or annually) is determined by the Department of Revenue based on your sales volume. Returns and payments are typically due by the 20th day of the month following the reporting period.
- Remitting Collected Taxes: Ensure timely payment of collected taxes to avoid penalties. Late filings may incur a penalty of 5% per month, up to a maximum of 25%, plus interest on the unpaid tax balance.
Record-Keeping Best Practices
Maintaining accurate records is essential for compliance and audit preparedness:
- Transaction Documentation: Retain detailed invoices and receipts for all sales, including information on items sold, prices, taxes collected, and customer details.
- Tax Filings: Keep copies of all submitted tax returns and payment confirmations.
- Exemption Certificates: If selling to tax-exempt entities or resellers, collect and store valid exemption or resale certificates.
Tennessee law requires that these records be preserved for a minimum of three years and be readily available for inspection by the Department of Revenue.
By diligently following these steps, furniture sellers in Tennessee can ensure compliance with state tax regulations, fostering trust with customers and authorities alike.
Simplifying Tennessee Sales Tax: How HOST Has Your Back
With Tennessee’s layered tax system—state, local, and even special district rates—calculating and remitting the correct sales tax on furniture can get complicated fast. That’s why thousands of businesses trust Hands Off Sales Tax (HOST) to handle compliance from end to end.
What HOST Does for You
- Sales Tax Registration & Nexus Evaluation
HOST helps determine where your business has sales tax obligations and takes care of registration with both the Tennessee Department of Revenue and any applicable local jurisdictions. - Accurate Tax Rate Management
HOST ensures you’re charging the right rate every time, no matter where your customer is. That includes factoring in local tax variations and caps on taxable amounts. - Automated Filing & Remittance
Forget spreadsheets and deadlines—HOST files your returns, remits payments, and keeps you in compliance with Tennessee’s filing schedules and documentation requirements. - Ongoing Support & Audit Defense
If you receive a notice or face an audit, HOST responds directly and helps protect your business from penalties.
In short, if you sell furniture in Tennessee and want zero stress around tax compliance, HOST is the expert partner you’ve been looking for.
Don’t Let Sales Tax Trip You Up
Tennessee’s sales tax system is anything but simple—especially when it comes to high-ticket items like furniture. Between state rates, local add-ons, and use tax obligations, a small mistake can turn into a costly problem. Whether you’re a seller trying to stay compliant or a buyer wanting clarity, understanding TN sales tax on furniture is essential.
If this feels overwhelming, Hands Off Sales Tax (HOST) is here to help. From registration to remittance, they handle it all—accurately, efficiently, and stress-free. Reach out to HOST today for a consultation and take the guesswork out of tax compliance.
