The State of Tennessee is hosting two sales tax holidays, both beginning within the next week. The traditional sales tax holiday on clothing, school supplies, and computers is Friday, July 28 through Sunday, July 30. An unprecedented three-month sales tax holiday on groceries begins on Tuesday, August 1 and ends on Tuesday, October 31.
Tennessee’s sales tax will be eliminated for select items during this year’s back-to-school tax-free holiday. Items such as clothing, school supplies, and computers can be purchased without sales tax but with some stipulations, according to the Tennessee Department of Revenue. Certain restrictions apply. Items sold online are also eligible. Items must be purchased for personal use, not for business or trade.
Tax-exempt (no tax charged) items include:
- General apparel that costs $100 or less per item, such as shirts, pants, socks, shoes, dresses, etc.
- School and art supplies with a purchase price of $100 or less per item, such as binders, backpacks, crayons, paper, pens, pencils, and rulers, and art supplies such as glazes, clay, paints, drawing pads, and artist paintbrushes
- Computers for personal use with a purchase price of $1,500 or less
- Laptop computers, if priced at $1,500 or less, also qualify as well as tablet computers
The tax suspension on food and groceries is meant to alleviate some of the recent financial burden on households amid a period of high food prices. The price of eggs, in one notable example, skyrocketed in late 2022 and early 2023, peaking at $5.30 a dozen, according to data from the U.S. Department of Agriculture. Egg prices have dropped considerably, now costing between $0.99 and $1.39 according to recent USDA data.
The cost of all food is still 6.7% higher than it was in 2022, according to the USDA’s June consumer price index report, making the three-month tax holiday a welcome relief.
Food and food ingredients sold at grocery stores and other food dealers will not have a sales tax. The Tennessee Department of Revenue defines food and food ingredients as “liquid, concentrated, solid, frozen, dried or dehydrated substances that are sold to be ingested or chewed by humans and are consumed for their taste or nutritional value.”
What will not be exempt:
- Alcoholic beverages, tobacco, candy, dietary supplements and food prepared by the seller will still be taxed.
- Food and food ingredients purchased from vending machines and other unmanned retail spaces where food and beverages can be purchased remain subject to sales tax.
A list of exempt and non-exempt items for both sales tax holidays is available at tn.gov/revenue/taxes/sales-and-use-tax/sales-tax-holiday.
