Minimum Sales Rate Tax for 2025
| 7% | Column content | Column content | Column content | Column content | |
| 0% | Column content | Column content | Column content | Column content | |
| 2.25% | Column content | Column content | Column content | Column content | |
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| Rtd Greater Denver | Column content | Column content | Column content | Column content | |
| Scientific & Cultural Fac.(cd) | Column content | Column content | Column content | Column content | |
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| Minimum combined sales tax rate value | 9.25% | Column content | Column content | Column content | Column content |
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| Economic sales nexus threshold | $100,000 | Column content | Column content | Column content | Column content |
| Transactions threshold | N/A | Column content | Column content | Column content | Column content |
| Sales tax return filing due date | 20th day of the month following the reporting period | Column content | Column content | Column content | Column content |
The base state sales tax rate in Tennessee is 7.0%, but since the Hamilton County tax rate is 2.25% and the city-specific tax is 0%, the minimum sales tax rate for Chattanooga is 9.25%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Looking for help calculating your sales tax? Contact us today to book a free consultation!
What is nexus?
In Chattanooga, businesses must understand “nexus” to determine their tax obligations. Nexus refers to the connection that requires a business to collect sales tax in a state. This concept became even more important after the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., which allowed states to require sales tax collection based on economic activity rather than just a physical presence.
Specific sales tax rules for Chattanooga
Tennessee applies unique tax rates to various goods and services. Food is taxed at 4%, while aviation fuel is taxed at 4.25%. Manufacturers enjoy reduced rates, paying 1% for industrial water and 1.5% for energy fuel and electricity used in data centers. Manufactured homes are taxed at 3.5%, and hemp-derived cannabinoids at 6%. Telecommunications for businesses are taxed at 7.5%, with cable TV and satellite services both at 8.25%. Qualified common carriers pay a 3.75% use tax on out-of-state property purchases.
Services
Most services are taxable
Goods
Most items are taxable, e.g. appliances, vehicles, furniture, sporting goods, and electronics.
Clothing
Clothing is taxable unless there is a tax holiday
Electronics
Taxable.
SaaS
Subject to sales tax
Digital Products
Generally taxable
Software
Pre-written and custom software are both taxable
Freight/Shipping
Generally not subject to sales tax.
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