Tennessee Car Sales Tax 2026 — TN Vehicle Tax Guide

Tennessee Vehicle Tax Overview

Tennessee charges 7% state sales tax on vehicle purchases, with local jurisdictions adding 2-2.5% in additional taxes. This makes Tennessee one of the higher-tax states for vehicle purchases, especially in major metropolitan areas.

State vs Local Tax Rates

Tennessee's vehicle tax has two main components:

State rate: 7%
Local add-on: 2-2.5% depending on city/county
Combined range: approximately 9% to 9.5% in metro areas

Metro Area Rate Comparison

Major Tennessee cities have some of the highest combined vehicle tax rates:

Memphis (Shelby County): approximately 9.5% combined
Nashville (Davidson County): approximately 9.25% combined
Knoxville (Knox County): approximately 9.25% combined
Chattanooga (Hamilton County): approximately 9.25% combined

High-Tax Region

Tennessee's combined vehicle tax rates are among the highest in the region, comparable to or exceeding neighboring states' rates when local taxes are factored in.

Trade-In Tax Deduction

Tennessee allows trade-in vehicle value to reduce the taxable purchase price for both state and local sales tax. This exemption applies at the dealership level and can significantly reduce your total tax burden.

Additional Tennessee Fees

Vehicle purchases include:

Title fee: $11
Registration: $23-28
Plate fee: $13.50 annually
Sales tax: 7%+ depending on location

Conclusion

Tennessee's high combined vehicle tax rates (approaching 10% in major cities) make vehicle purchases more expensive than in many neighboring states. Trade-in exemptions are especially valuable for reducing the overall tax burden in these high-rate areas.

Questions

What is the vehicle sales tax rate in Tennessee?

Tennessee charges 7% state sales tax on vehicle purchases, plus local taxes that can add 2-2.5% depending on your city and county. Combined rates in major cities can approach 9-10%.

How much tax do I pay on a car in Nashville, Tennessee?

Nashville and surrounding Davidson County have combined vehicle tax rates around 9.25% (7% state + 2.25% local). On a $30,000 car, this means approximately $2,775 in total sales tax.

Does trade-in value reduce Tennessee car tax?

Yes, Tennessee allows trade-in vehicle value to reduce the taxable purchase price for both state and local sales tax calculations. This exemption can save significant money.

What are the highest vehicle tax rates in Tennessee?

Memphis and Nashville have some of the highest combined vehicle tax rates in Tennessee, approaching 9.5% and 9.25% respectively due to additional local and transit district taxes.