Sales Tax Exemption in Tennessee

A Tennessee exempt organization must obtain the Exempt Organizations or Institutions Sales and Use Tax Certificate of Exemption prior to making purchases without the payment of tax. Nonprofit entities are generally exempt from paying sales or use tax on their purchases of property and services.

Sales tax exemption forms can be downloaded from the Tennessee Department of Revenue. Your sales tax will be automatically calculated and added to your bill whenever you make a purchase at a licensed Tennessee retailer.

One of the following documents must be submitted to a seller for sales tax exemption: A copy of the Tennessee Department of Revenue Agricultural Sales and Use Tax Certificate of Exemption. A copy of the wallet-sized exemption card also provided by the Department of Revenue.

Obtaining Sales Tax Exempt Status

To get sales tax exempt status in Tennessee, a nonprofit organization must obtain an Exempt Organizations Sales and Use Tax Certificate of Exemption from the Tennessee Department of Revenue before making tax-exempt purchases.

Documents for Sales Tax Exemption

To substantiate its tax-exempt status, a nonprofit must present a valid, current, accurate certificate of sales tax exemption to each business where it makes purchases. The seller is responsible for keeping records of exemption certificates.

Tennessee Sales Tax Information

Nonprofit entities generally do not pay sales or use tax on property and service purchases. Protected farms and farm operations are also exempt, including farmland, buildings, machinery, and commercial agriculture activities involving products like livestock, dairy, and produce.

Sales tax exemption forms can be downloaded from the Tennessee Department of Revenue website. Retailers automatically calculate and add sales tax to customer purchases.

Submitted documents must include an Agricultural Sales and Use Tax Certificate of Exemption, the wallet-sized exemption card, or another document provided by the Department of Revenue.

Federal Tax-Exempt Status and State Sales Taxes

State sales tax exemption requires a separate application even with IRS 501(c)(3) status. For nonprofits that make taxable sales or purchases, Tennessee sales tax exemption allows more funds to be used for their mission.