Nashville Sales Tax Guide for Businesses in 2025

No matter where you live or where your online business is based — if you have customers in Nashville, you must follow city and local sales tax rules in addition to Tennessee's rules. That’s what this guide is for! This guide includes everything you need to know about digital tax laws in Nashville, whether your customers live in The Gulch or Germantown.

Nashville Tax Jurisdiction Breakdown for 2025

• Tennessee State Sales Tax: 7%
• Davidson County Sales Tax: 2.75%
• Nashville City Sales Tax: 0%

What is the sales tax rate in Nashville, Tennessee?

The minimum combined 2025 sales tax rate for Nashville, Tennessee is 9.75%. This is the total of state, county and city sales tax rates. The Tennessee sales tax rate is currently 7%. The Davidson County sales tax rate is 2.75%. The Nashville sales tax rate is 0%.

These rates go for standard taxable products. But other rates might apply to your business.

If you’re selling “vice” products like tobacco or alcohol, you might have an increased rate. If you’re selling essential items, such as medicine or clothing, or educational materials, you might have an exempt or reduced rate. More on that next!

What products are exempt from Nashville sales tax rate?

• Tangible personal property used primarily (more than 50%) by a qualified farmer or nursery operator in agriculture operations
• Equipment used primarily for harvesting timber
• Gasoline or diesel used in agricultural operations
• Seeds, seedlings, and plants grown from seed
• Fertilizer
• Pesticides
• Livestock and poultry feeds
• Drugs used for livestock
• Gasoline
• Textbooks
• School meals
• A number of healthcare products

What digital products are taxed in Nashville?

First, let’s confirm what you’re trying to sell in Nashville. Are you selling digital products?

A digital product is any product that’s stored, delivered, and used in an electronic format. These are goods or services that the customer receives via email, by downloading them from the Internet, or through logging into a website.

You’re probably consuming and using digital products all day long, whether or not you realize it. Here are some common ones on the market today:

• E-books, images, movies, and videos, whether buying a copy from Shopify or using a service like Netflix. In tax language, these products are in a category usually called, “Audio, visual, or audio-visual products.”
• Downloadable and streaming music, whether buying an MP3 or using a service like SoundCloud or Spotify. Of course, these products also fall in the audio category.
• Cloud-based software and as-a-Service products, such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).
• Websites, site hosting services, and internet service providers.
• Online ads and affiliate marketing. Income from these services can be considered taxable under digital tax policies.

Some US states can have more specific definitions or exceptions. In Nashville, a sale of a specified digital product occurs in Tennessee if:

• The purchaser receives the electronically transferred digital property at a Tennessee location of either the seller or purchaser, or
• The seller’s business records, or the address obtained from the purchaser during the sale indicates a Tennessee billing address.

It should also be noted that the following items electronically transferred to a purchaser are not specified digital products:

• Video or audio greeting cards sent by email
• Digital magazines or periodicals
• Individual digital photographs
• Data processing and information services
• Video or electronic games
• Digital newspapers
• Chatroom discussions or weblogs
• Satellite radio services

Nashville’s Digital Product Exemptions

Sales and Use Tax Exemptions for Digital Equivalents

If a physical version of a product is not taxed, then the digital version of that same product is also not taxed.

Resale of video services

Digital products bought by video service providers to broadcast, distribute, or resell can be purchased tax-free if they use a resale certificate.

You can find more information and examples in the Tennessee Sales and Use Tax Manual.

How does Nashville sales tax compare to the rest of Tennessee?

Nashville’s combined sales tax rate of 9.75% is the highest possible rate in Tennessee, where rates can vary from 7% to 9.75%. This reflects the city’s approach to addressing local issues and funding city services through the sales tax system.

Learn more about sales tax rules state-wide in this business guide to sales tax in Tennessee.

What creates sales tax nexus in Nashville?

Since Nashville is located in Tennessee, it follows the same state-level sales tax nexus rules. Forms of Tennessee state sales tax nexus include:

• Economic nexus: When a business engages in certain activities in this state and makes sales of $100,000 or more to Tennessee customers during the previous tax year. More on that below!
• Physical location: This could be an office or a warehouse holding your inventory.
• Employee location: If you have an employee or any other type of representation based in a particular state or city, your business must register for sales tax there.
• Affiliate nexus: If you rely on in-state businesses to promote and refer your business, and you receive a substantial amount of income through these affiliates, then you have sales tax nexus.
• Trade Shows: You may be liable for collecting and remitting Tennessee use tax on orders taken or sales made during Tennessee conventions or trade shows, even if only in the state for trade show activity for one day.

Nashville economic nexus as a remote seller

If your business is fully located outside of Tennessee, then economic nexus is your main concern. Here’s how it works. The economic threshold amount refers to your total sales in the whole state over a 12-month period. This can be a calculation of sales in the last twelve months, or a prediction of sales in the next twelve months — any rolling year-long period, past or future.

Basically, if your annual sales in Tennessee remain below 100,000, then you don’t need to worry about sales tax at all. Phew!

But once your sales do surpass $100,000, then you must register for sales tax and comply with all of the Tennessee rules around tax rate and collection, invoices, and filing returns.

Who needs a seller’s permit in Nashville?

Any business with sales tax nexus, according to the rules above, must apply for a seller’s permit in Tennessee right away.

The seller’s permit comes with a sales tax registration number, which establishes you in the Tennessee tax system as a legal business. This number tracks your business through the system: the taxes you pay, the tax credits you receive, plus the tax you charge from customers.

How to get a seller’s permit in Nashville

So, it turns out you do need to register for tax in Nashville. Don’t worry! Just follow these instructions on how to register for sales tax in Tennessee and that will cover you across the state.

How to calculate Nashville sales tax?

Once you’re registered for taxes, you’re expected to apply sales tax to every taxable sale to a Nashville resident. That means 9.75% for most products.

If your customer is a fellow business, and they’ve provided a valid sales tax exemption certificate, then adding and collecting tax isn’t necessary.

How to collect sales tax in Nashville

Tax-compliant receipts in Nashville

In order to comply with tax laws, you should include the following information on your receipts or invoices to customers in Nashville:

• Your business’ name and address
• Your business’ sales tax registration number
• Invoice date
• Invoice sequencing number
• Buyer’s name and address
• Buyer’s sales tax registration number, if they have one.
• sales tax (amount and rate) applied to each item
• Final amount after tax is added

The easiest solution for the sales tax receipt would be to use a sales tax software that automatically generates and sends all invoices (as soon as the sale is complete), and also stores them in the cloud for you.

Quaderno provides automatic tax invoicing for every transaction. The app sends tax-compliant receipts, invoices, and credit notes automatically, on the spot. You can also set up recurring invoicing. In fact, Quaderno helps automate many other parts of tax compliance, from adding the correct tax rate calculations to your sales to providing instant reports for filing returns. Give it a try for free.

How to file and pay sales tax in Nashville

Charging and collecting tax is only the first half of staying compliant. The second half is filing returns and paying whatever you might owe to the government.

Nashville sales tax due dates depend on how frequently you file your return:

• Businesses selling $1,000 or less per month are authorized to file monthly or quarterly.
• Businesses selling over $400 gross sales per month or $4,800 in gross sales per year must file monthly.

If you file monthly, they’re due on the 20th day of the month following the end of the reporting period. So that means the April tax return is due by May 20th. If you file quarterly, they’re due on the 20th of the month following the end of the quarter (January 20, April 20, July 20, October 20). If you file annually, it’s due on January 20th. If the due date falls on a weekend or holiday, then your sales tax filing is generally due the next business day.

You can usually file and pay online! Check out more instructions on how to file sales tax in Tennessee.