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Tennessee And Texas State Sales And Use Tax Laws



Aaron Giles

Tennessee State Sales And Use Tax

The state of Tennessee levies a 7% state sales tax on the retail sale, lease or rental of most goods and some services. Local jurisdictions impose additional sales taxes ranging between 1% and 2.75%. The range of total sales tax rates within the state of Tennessee is between 8.5% and 9.75%.

Use tax is also collected on the consumption, use or storage of goods in Tennessee if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of Tennessee on or before the 20th day of February.

Tennessee Department Of Revenue
Tennessee State Tax Laws
Tennessee State Tax Forms


Texas State Sales And Use Tax

The state of Texas levies a 6.25% state sales tax on the retail sale, lease or rental of most goods and some services. Local jurisdictions impose additional sales taxes up to 2%. The range of total sales tax rates within the state of Texas is between 6.25% and 8.25%.

Use tax is also collected on the consumption, use or storage of goods in Texas if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of Texas on or before the 20th day of February.

Texas Sales Tax Exemptions For Healthcare

Texas divides hospitals and healthcare facilities in to two categories for purposes of sales and use tax exemptions – nonprofit and for profit entities.  The rules are straightforward for nonprofit hospitals and healthcare facilities because all items sold or leased to, or stored, used or consumed by organizations created for religious, educational or charitable purposes are exempt from Texas sales and use tax.  For profit hospitals and healthcare facilities have more complex rules, but there are a number of categories of purchases which qualify for Texas sales tax exemptions.  Some prominent exemptions include: hospital beds and replacement parts, intravenous or IV systems and their components, hypodermic needles and syringes, medical kits if the cost of the exempt items included in the kit are greater than the cost of the taxable items, medical oxygen and other drugs, prosthetic devices, labor charges and maintenance agreements for radiation emitting equipment such as x-rays, and orthopedic appliances and devices (for more information about what qualifies for the orthopedic Texas sales tax exemption please see our Research Bulletin written by our sales tax consultants about Texas Orthopedic Devices and Appliances Tax Exemption (aka Zimmer Ruling))

 Texas Sales And Use Tax Exemptions For Manufacturing

Texas offers broad sales and use tax exemptions for manufacturers. Machinery and equipment used in the production process qualify for sales tax exemptions within Texas. Repair parts and labor to qualifying machinery and equipment are also exempt. Consumables including lubricants and chemicals consumed during the manufacturing process are exempt if their use is necessary and essential to prevent the failure, decline or deterioration of exempt manufacturing equipment. Safety apparel or clothing used by employees during the manufacturing or processing of tangible personal property is exempt provided that the apparel or clothing is not sold to the employees and the manufacturing process would not be possible without the use of such apparel or clothing. Utilities consumed during production also qualify for an exemption, however a valid utility study conducted by an engineer must document the percentage of utilities consumed for exempt purposes on any meter with mixed taxable and non-taxable use. Agile Consulting Group’s sales tax consultants have a wealth of experience within the state of Texas and can ensure taxpayers are maximizing the benefit of Texas sales tax exemptions for which they qualify.

State Of Texas Department Of Revenue

State Of Texas Tax Forms

Texas Tax Laws Search


Have questions? Contact Aaron Giles

 

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Aaron C. Giles is the Founder and President of Agile Consulting Group. Aaron spent five years working within the specialty niche of Sales & Use Tax at Brown & Associates before forming his own firm in 2005. He has worked hundreds of audits in states all across the U.S. during that time and has delivered savings of over $75M in the form of refunds and credits to his clients. Today, he leads a group of talented, detail-oriented colleagues who focus exclusively on Sales & Use Tax.

Some of our firms’ greatest achievements have come in successfully arguing new and unique perspectives to existing tax law in various states enabling our clients to claim exemptions on categories of purchases previously held to be taxable. Included in these victories are: communication services taxes for religious nonprofit hospitals in FL, bulk purchases of drugs in VA, specific surgical tools and instruments for healthcare providers in TX, printing plates in GA, railroad utilities in KY, and most recently software in AL.

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