Sales Tax In Tennessee: What You Need To Know In 2023
What is the Sales Tax Rate in Tennessee?
As of the year 2023, the sales tax rate in Tennessee is 7%, with no additional local or county taxes. This rate applies to all goods and services that are subject to sales tax. This rate is slightly higher than the rate that was in effect in 2020, which was 6.5%.
What Goods and Services are Subject to Sales Tax in Tennessee?
In Tennessee, most goods and services are subject to sales tax, including tangible personal property, digital products, and services such as repairs and maintenance. Exceptions to this include food items that are not prepared for immediate consumption, motor fuel, and most prescription drugs. There are also some services that are not subject to sales tax, such as professional services performed by licensed attorneys, doctors, and accountants.
Who is Responsible for Collecting Sales Tax?
In Tennessee, it is the responsibility of the seller to collect sales tax from the buyer. It is important for businesses to be aware of their responsibility to collect and remit sales tax. If the business does not collect sales tax, they could be subject to fines or other penalties.
How is Sales Tax Paid?
Sales tax is typically paid at the time of purchase. Buyers may be required to provide proof of payment of the sales tax when they make their purchase. The seller is then responsible for remitting the sales tax to the state. This can be done through the Tennessee Department of Revenue's MyTax portal. It is important for businesses to ensure that they are properly remitting the sales tax that they collect.
What is the Penalty for Not Collecting or Remitting Sales Tax?
If a business fails to collect or remit sales tax, they could be subject to fines or other penalties. The Tennessee Department of Revenue may also issue a notice of assessment to the business, which includes the amount of sales tax owed and any applicable penalties or interest. It is important for businesses to make sure that they are compliant with sales tax requirements, as failure to do so could have serious consequences.
Are There Any Tax Breaks or Incentives Available for Businesses?
Yes, there are a number of tax breaks and incentives available for businesses in Tennessee. These include credits for businesses that create jobs, research and development incentives, and credits for businesses that invest in renewable energy. Businesses should check with the Tennessee Department of Revenue to see what options are available to them.
What is the Process for Filing Sales Tax Returns?
Businesses must file sales tax returns with the Tennessee Department of Revenue. The returns must be filed on a quarterly basis. The returns must include the total amount of sales tax collected as well as any applicable credits and deductions. The returns must be filed by the due date, which is typically the 20th of the month following the end of the quarter.
Are There Any Resources Available to Help Businesses with Sales Tax Compliance?
Yes, the Tennessee Department of Revenue provides a number of resources to help businesses with sales tax compliance. This includes online tutorials and webinars, as well as a helpful FAQ section. The department also provides a sales tax calculator to help businesses determine the amount of sales tax that they need to collect and remit. Additionally, businesses can contact the department directly to get help with any questions or concerns that they may have.
Conclusion
Sales tax is an important part of doing business in Tennessee. It is important for businesses to understand their responsibility to collect and remit sales tax, as well as the process for filing returns. There are a number of resources available to help businesses with their sales tax compliance, including tutorials, webinars, and a sales tax calculator. By understanding the sales tax requirements and taking advantage of these resources, businesses can ensure that they are compliant with sales tax laws.