Tennessee Amazon Sales Tax
Tennessee enforces its marketplace facilitator law as of October 2020, so Amazon collects all Tennessee sales tax. Tennessee carries one of the highest combined rates in the country and is a major FBA fulfillment center state.
Overview
Tennessee's marketplace facilitator law took effect October 1, 2020, when the state lowered its remote-seller and marketplace threshold to $100,000 (Public Chapter 759). The state base rate is 7% — among the highest state rates in the US — and local jurisdictions add up to 2.75% on top, producing a maximum combined rate of about 9.75%, one of the highest combined rates anywhere in the country. Amazon collects and remits Tennessee sales tax on every order shipped to a Tennessee address.
Tennessee hosts major Amazon fulfillment and distribution facilities (including sites in the Nashville, Memphis, Chattanooga, and Knoxville areas), so Amazon has long had physical-presence nexus in the state; combined with the marketplace facilitator law, this means marketplace orders are fully covered by Amazon's collection. Tennessee is notable in that its economic nexus standard is a flat $100,000 sales threshold with NO transaction-count alternative.
For FBA sellers, Amazon automatically collects and remits on Tennessee marketplace orders, so an Amazon-only seller generally has no separate Tennessee registration obligation. Sellers with their own website or other non-marketplace sales should track those separately. Consult a tax professional for edge cases such as product-specific taxability.
What FBA sellers still need to know
No registration is required for ongoing Amazon-only sales. Direct or non-Amazon sellers exceeding $100,000 in retail sales delivered into Tennessee during the previous 12-month period must register and remit (Tennessee uses a $100,000 sales threshold with no transaction-count test).
This content is educational and not legal or tax advice. Sales tax law changes frequently and is jurisdiction-specific. Always verify with a qualified tax professional and the state revenue department before making compliance decisions.
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