Tennessee Sales Tax Calculator for Construction Materials
Calculate the total sales tax owed on construction materials purchased in Tennessee, including the state rate and applicable local county/city rates.
Formula
State Tax = Purchase Price × State Rate
Local Tax = Purchase Price × Local Rate
Total Tax Due = State Tax + Local Tax
Total Cost = Purchase Price + Total Tax Due
Standard Construction Materials:
State Rate = 7.00%
Local Rate = 2.75% (most counties) or 2.25% (Davidson, Hamilton, Knox, Shelby)
Industrial Machinery / Qualified Equipment (TCA §67-6-206):
State Rate = 1.50%
Local Rate = capped at 1.50%
Example: $10,000 of standard materials in Williamson County (2.75% local):
State Tax = $10,000 × 7% = $700
Local Tax = $10,000 × 2.75% = $275
Total Tax = $975 | Total Cost = $10,975
Assumptions & References
- Tennessee state sales tax rate on tangible personal property (including construction materials) is 7% per TCA §67-6-202.
- Local option sales tax rates are set by county and city governments. Most Tennessee counties levy 2.75%; Davidson, Hamilton, Knox, and Shelby counties levy 2.25%.
- Industrial machinery used in qualified manufacturing operations is taxed at a reduced state rate of 1.5% with a local rate capped at 1.5% per TCA §67-6-206.
- Lump-sum contractors are treated as the end consumer of materials and must pay sales tax at purchase; they do not collect sales tax from the project owner on materials.
- Under a separated (cost-plus) contract, the contractor may collect sales tax from the owner on the materials portion only, provided the contract clearly itemizes materials and labor.
- Labor charges for construction services are not subject to Tennessee sales tax.
- Certain materials incorporated into real property may qualify for exemptions (e.g., materials for government or nonprofit projects); consult the Tennessee Department of Revenue for project-specific exemptions.
- Local rates shown reflect general county rates; some cities within counties may have additional rates. Verify with the Tennessee Department of Revenue for the exact rate at your project location.
- This calculator is for estimation purposes only and does not constitute tax or legal advice.