Tennessee Resale Certificate 2026: Complete Guide to Tax-Free Purchasing

Tennessee has one of the highest sales tax rates in the country, which makes the resale certificate especially valuable for businesses operating in the state. With no state income tax on wages or salaries, Tennessee relies heavily on sales tax revenue to fund government operations. That dependence means the state enforces its sales tax laws aggressively.

Understanding how Tennessee's Certificate of Resale works, who qualifies, and how to register through the state's online system will help you purchase inventory tax-free and stay on the right side of the Tennessee Department of Revenue.

Tennessee Sales Tax Rates in 2026

State Rate

Tennessee's state sales tax rate is 7%, one of the highest base rates in the nation. Only a handful of states match or exceed it.

Local Rates

Tennessee counties and municipalities add local sales tax on top of the 7% state rate. Local rates range from 1.5% to 2.75%, bringing combined rates across the state between 8.5% and 9.75%.

Rutherford County, home to Murfreesboro, hits the maximum combined rate of 9.75%. At that rate, a $100,000 inventory purchase without a resale certificate costs you an extra $9,750 in sales tax.

Use our savings calculator to estimate your specific savings based on your location and purchasing volume.

Reduced Rate on Food

Tennessee taxes grocery food (unprepared food for home consumption) at a reduced state rate of 4%, plus the applicable local rate. This matters for restaurants, food service businesses, and grocery retailers who buy food items for resale.

What Is the Tennessee Certificate of Resale?

The Tennessee Certificate of Resale is the document businesses use to purchase tangible personal property tax-free when the goods will be resold in the normal course of business. It is sometimes referred to informally as a "resale certificate" or "exemption certificate," but the official Tennessee form is specifically called the Certificate of Resale.

Key Characteristics

• Issued by the business, not the state. Tennessee does not mail you a pre-printed certificate. You complete a Certificate of Resale form and provide it to your supplier.
• Requires a valid Tennessee sales tax registration. You must have an active account with the Tennessee Department of Revenue.
• No expiration date. Unlike Florida's annual DR-13, Tennessee's Certificate of Resale does not expire. However, it is only valid while your sales tax registration remains active.
• Blanket use. You can issue a single Certificate of Resale to each supplier to cover all future qualifying purchases, rather than filling out a new form per transaction.

Why Tennessee Enforces Sales Tax Strictly

Tennessee has no state income tax on wages, salaries, or earned income. The state repealed the Hall Income Tax (which taxed interest and dividend income) entirely in 2021. This means sales and use tax is the state's primary revenue source, generating over $13 billion annually.

Because of this dependence, the Tennessee Department of Revenue devotes significant resources to sales tax audits and enforcement. Misuse of the Certificate of Resale, failure to register, or failure to collect and remit sales tax will attract attention faster in Tennessee than in many other states.

Audit risk factors in Tennessee:

• Using a Certificate of Resale for non-qualifying purchases
• Significant discrepancies between reported purchases and reported sales
• Failure to file returns on time
• Operating without registration

Who Qualifies for a Tennessee Certificate of Resale?

You qualify if you:

• Are registered with the Tennessee Department of Revenue for sales and use tax
• Buy tangible personal property for resale in the regular course of business
• Sell, rent, or lease taxable goods or services in Tennessee

Business types that commonly qualify:

• Retailers (brick-and-mortar and e-commerce)
• Wholesalers and distributors
• Restaurants and food service businesses
• Online marketplace sellers with Tennessee nexus
• Manufacturers purchasing raw materials for products they sell
• Rental companies leasing tangible property to customers

Who does NOT qualify:

• Consumers buying for personal use
• Businesses buying operational supplies, equipment, or tools
• Nonprofits seeking exemption (Tennessee has separate exemption certificates for qualifying nonprofits)

How to Register: TNTAP (Tennessee Taxpayer Access Point)

Tennessee's online registration system is called TNTAP, the Tennessee Taxpayer Access Point. This is where you register for a sales tax account, file returns, make payments, and manage your account.

Registration Steps

1. Go to TNTAP at tntap.tn.gov
2. Create an account with your email address and set up login credentials
3. Select "Register a New Tax Account" from the menu
4. Complete the application with your business information:
   • Business legal name and DBA (if applicable)
   • Federal EIN (or SSN for sole proprietors)
   • Business address and mailing address
   • Type of business entity (LLC, corporation, sole proprietor, etc.)
   • Description of business activity
   • Estimated monthly sales
   • Start date of business operations in Tennessee
5. Submit the application

Processing Time

Online applications through TNTAP are typically processed within 3 to 5 business days. Some applications may take longer if the Department of Revenue needs additional information.

Once approved, you will receive your Tennessee sales tax account number. This number goes on every Certificate of Resale you issue.

Need help with the registration process? We handle the complete application for you.

Get Your Resale Certificate -->

What Qualifies for Tax-Free Purchase?

Exempt Purchases (Tax-Free with Certificate of Resale)

• Inventory for resale: Products you will sell to customers
• Raw materials and components: Items that become part of a finished product you sell
• Packaging materials: Boxes, bags, wrapping, labels used to package goods for sale
• Items for rental or lease: Property you will rent to customers

Non-Exempt Purchases (You Pay Tax)

• Office furniture and equipment: Desks, chairs, computers for business use
• Tools and machinery: Used in operations, not transferred to customers
• Vehicles: Business-use vehicles (unless you are a vehicle dealer)
• Building materials: For your own business premises
• Supplies consumed in operations: Cleaning products, printer supplies, breakroom items

The distinction is straightforward: if the item will be resold to a customer or become a component of a product you sell, it qualifies. Everything else is a taxable business purchase.

Tennessee's Single Article Tax Cap

Tennessee has a unique provision called the single article tax. The local sales tax applies only to the first $1,600 of any single article (a single item in a single transaction). The 7% state rate applies to the full purchase price regardless of amount.

How This Works

If you buy a single piece of equipment for $5,000 in Nashville (9.25% combined rate):

Without the single article cap, you would owe $462.50 in total tax. The cap saves $76.50 on this purchase.

Why this matters for resellers: The single article cap applies to taxable purchases like equipment. It does not affect your resale-exempt inventory purchases, because those are already tax-free. But if you buy expensive equipment (machinery, vehicles, display fixtures) for your business, the cap limits your local tax exposure.

Tennessee Rules for Contractors

Tennessee follows the general rule that contractors are treated as the end consumer of materials they purchase and install into real property.

The Standard Treatment

• Contractors pay sales tax when purchasing construction materials
• Contractors do not charge customers a separate sales tax on installed materials
• The Certificate of Resale cannot be used for materials that will become part of real property

Exceptions

1. Retail sales of materials (not installed): If a contractor sells materials to a customer without installing them, those purchases qualify for the resale exemption.

2. Industrial machinery exemption: Tennessee provides a sales tax exemption for certain industrial machinery used directly in manufacturing. This is a separate exemption from the Certificate of Resale.

3. Qualified government contracts: Some government construction projects may qualify for exemption under specific provisions. Documentation from the government entity is required.

Example

For a deeper look at contractor rules across all states, read our construction materials sales tax guide.

Record Keeping Requirements

Tennessee requires businesses to maintain all sales tax records for at least 3 years from the due date of the return or the date the return was filed, whichever is later. The Department of Revenue can extend this period if fraud or willful evasion is suspected.

What to Keep

• Certificates of Resale you have issued to suppliers (as the buyer)
• Certificates of Resale you have received from customers (as the seller)
• All invoices and purchase records tied to exempt transactions
• Sales records showing tax collected from customers
• Filed returns and payment confirmations

Audit Preparation

Tennessee auditors will:

• Review all exemption certificates on file
• Verify that your sales tax registration was active during the audit period
• Cross-reference exempt purchases against reported sales
• Assess tax, penalties, and interest on any transactions where certificates are missing or invalid

Having complete, organized records is essential. Missing a single Certificate of Resale can result in the auditor assessing tax on all purchases from that supplier during the audit period.

Common Mistakes in Tennessee

Mistake 1: Assuming No Income Tax Means Less Scrutiny

The opposite is true. Because sales tax is Tennessee's primary revenue source, enforcement is rigorous. The Department of Revenue has dedicated audit teams focused on sales and use tax compliance.

Mistake 2: Using the Certificate for Equipment Purchases

Tools, vehicles, and machinery are not inventory for resale. Using the Certificate of Resale for these purchases is a common audit finding that results in back taxes plus penalties.

Mistake 3: Not Registering for Out-of-State Sales into Tennessee

If you are an out-of-state seller with economic nexus in Tennessee ($100,000 in sales to Tennessee buyers), you must register for Tennessee sales tax. Our guide on economic nexus covers the current thresholds.

Mistake 4: Forgetting Local Tax Variations

Tennessee has over 350 local tax jurisdictions. If you operate in multiple locations, make sure you are collecting and remitting at the correct combined rate for each.

How Much Can You Save?

Calculate your exact savings with our savings calculator.

Get Your Tennessee Resale Certificate

Getting registered in Tennessee is straightforward through TNTAP. We handle the full application process and guide you through using your Certificate of Resale correctly.

• Fast processing through TNTAP
• Complete application assistance
• Ongoing compliance support

Get Your Resale Certificate -->

For complete details on Tennessee's requirements, visit our Tennessee state page.

With combined rates pushing 9.75% and aggressive enforcement driven by the state's reliance on sales tax revenue, a Tennessee Certificate of Resale is not optional for any business buying goods for resale. Get registered, keep your records organized, and use the certificate correctly.

Related Articles

• What Is a Resale Certificate? - Start with the fundamentals before navigating Tennessee's specific rules and registration.
• Common Resale Certificate Mistakes That Trigger Audits - Tennessee's strict enforcement makes audit awareness especially important.
• Multi-State Resale Certificates - If you buy from suppliers in other states, learn how to use your Tennessee certificate across state lines.