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Sales Tax Evasion

Tennessee Tax Fraud Home

Sales tax evasion is knowingly and willfully failing to remit sales tax collected or failing to pay sales or use tax when due.

In general, state sales and use tax is imposed on all retail sales, leases and rentals of most goods, as well as taxable services.

Sales tax is collected at the time of the sale, and the seller (retailer) is responsible for reporting and remitting the tax.

Use tax is the counterpart to the sales tax. Use tax is applied when merchandise (tangible personal property) is purchased from outside the state of Tennessee and imported into the state for use or consumption. The person or business who imports the merchandise for use or consumption is responsible for remitting the tax. The 45 states that impose a sales tax also levy a use tax.

Tennessee cities and counties have the option of imposing an additional local option sales tax.

Due Dates:

Sales Tax: Monthly, Quarterly, Annually (based on qualifications): Monthly - 20th day of the month following the end of the reporting period; Quarterly - 20th of the month following the end of the quarter; and Annually - January 20.

Use Tax: Depending upon the frequency of your purchases, you may file quarterly or annually. Quarterly - 20th of the month following the end of the quarter; and Annually - January 20.

Tax Rates:

As of July 1, 2012, the sales tax rate on food changed to 5.25%. Previously, the rate was 5.5%. All other tangible personal property, unless specifically exempted, remains at 7%.

State Single Article Rates - 2.75% on any single item sold in excess of $1,600 but not more than $3,200.

The use tax rate is the same as the sales tax rate.

Local tax - set by the local government - see local tax chart.

If you suspect Sales or Use Tax fraud, report the activity directly to the Tennessee Department of Revenue.

Click here to report sales tax fraud online.

More information about Tennessee's Sales and Use Tax