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Credit for Sales or Use Tax Paid in Another State

If you have already paid sales or use tax to another state on a purchase, those taxes already paid may be credited against the use tax you owe to Tennessee.  If you purchase goods in a state with a lower sales tax rate and pay the other state’s sales tax, you would only owe use tax on the difference between Tennessee’s rate and the other state’s rate.  If you purchase goods in a state with a higher sales tax rate and pay the other state’s sales tax, you would not owe any use tax in Tennessee on those goods.