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State Guide Last verified September 17, 2026

Tennessee Car Sales Tax, Trade-In Credit, and Out-of-State Rules

What the desk and the buyer each need to know when a Tennessee deal crosses state lines: the rate, the trade-in math, the exemption paperwork, and the drive-home tags. Every fact links to the official source.

Check an Out-of-State Deal Jump to Quick Facts

Every fact sourced to Tennessee official publications below

Short answer

Tennessee taxes vehicle sales at 7% state plus up to 2.75% local (on the first $1,600 of the price only, plus a 2.75% state single-article rate on the portion from $1,600 to $3,200) (depends on location). Tennessee taxes the price after the trade-in is deducted. Tennessee exempts out-of-state buyers only under specific conditions. Tennessee credits sales tax legally paid to another state, so the same dollars are not taxed twice. All of this describes a retail purchase from a dealer; leases and private-party sales run on different rules in most states.

Tennessee car sales tax quick facts

Last verified September 17, 2026
Sales tax rate on vehicles7% state plus up to 2.75% local (on the first $1,600 of the price only, plus a 2.75% state single-article rate on the portion from $1,600 to $3,200) (depends on location)[1]
Trade-in creditTennessee taxes the price after the trade-in is deducted. The trade-in must be of like kind and character and be identified as a trade-in by model and serial number on the customer's invoice, and the credit cannot exceed the sales price of the vehicle being purchased. A Tennessee resident who buys a vehicle in another state and imports it gets no trade-in credit against Tennessee use tax unless the traded-in vehicle was previously registered in Tennessee in that person's name.[2]
Selling to an out-of-state buyerTennessee exempts out-of-state buyers only under specific conditions. The buyer has up to three days to remove the vehicle from Tennessee to another state. A Seller/Purchaser Affidavit of Exemption (the 3-Day Affidavit) must be completed naming the city and state the vehicle will be delivered to. A vehicle registered in another state but permanently located in Tennessee does not qualify, and Tennessee residents who sign the affidavit but keep the vehicle in Tennessee can be held liable for tax, penalty, and interest.[2]
Credit for tax paid to another stateTennessee credits sales tax legally paid to another state, so the same dollars are not taxed twice. Tennessee credits the sales tax already paid to the state where the vehicle was purchased and collects only the rate difference at registration. Tennessee's state single article tax is still due at registration if it was not already collected.[3]
Dealer doc feeNo statutory cap[4] · taxable[5]
Temp tag for the drive homeTennessee licensed dealers issue temporary dealer drive-out tags (green tags) through the state's EZ-Tag print-on-demand system. Tennessee extended the temporary dealer drive-out tag from 30 days to 60 days.[6]
Out-of-state buyer registrationA person who moves to Tennessee from another state should register the vehicle within 30 days of the move. Limited exceptions exist, including out-of-state students attending school in Tennessee.[7]

Tennessee car sales tax calculator

Enter the sale price and any trade-in to estimate Tennessee vehicle tax and the out-the-door total before title and registration. It applies the verified rate, trade-in rule and doc fee treatment from the quick facts above.

General information, not tax or legal advice. Everything on this page was compiled from official Tennessee government publications (listed under Sources) and last verified September 17, 2026, but rates and rules change and errors are possible. Voltra makes no warranty as to accuracy or completeness and accepts no liability for decisions made on this data. Confirm the current rules with the Tennessee Department of Revenue or a licensed professional before acting on anything here. Covers retail dealer sales; leases and private-party sales follow different rules in most states.

From the desk

Tennessee stacks a local single-article tax with its own cap structure on top of the state rate, which makes the first few thousand dollars price differently than the rest. The desk that memorizes the cap points quotes faster than the DMS.

Selling to an out-of-state buyer in Tennessee

Tennessee exempts out-of-state buyers only under specific conditions. The buyer has up to three days to remove the vehicle from Tennessee to another state. A Seller/Purchaser Affidavit of Exemption (the 3-Day Affidavit) must be completed naming the city and state the vehicle will be delivered to. A vehicle registered in another state but permanently located in Tennessee does not qualify, and Tennessee residents who sign the affidavit but keep the vehicle in Tennessee can be held liable for tax, penalty, and interest.[2]

What makes the exemption stick is Seller/Purchaser Affidavit of Exemption for Motor Vehicles, Trailers, and Boats Sold for Removal from Tennessee Within Three Days (3-Day Affidavit), completed at delivery. Without it, the assessment letter goes to the dealership, not the buyer.

Either way, collecting the right tax is the easy part. The title work, the temp tag, and the out-of-state registration still have to land, and each one runs on its own clock.

Buying in Tennessee from out of state

If you live in another state and buy in Tennessee, the deciding rule is where the vehicle gets registered: your home state's tax applies at registration, and what happens at the Tennessee sale depends on the rule above. Tennessee credits sales tax legally paid to another state, so the same dollars are not taxed twice. Tennessee credits the sales tax already paid to the state where the vehicle was purchased and collects only the rate difference at registration. Tennessee's state single article tax is still due at registration if it was not already collected.[3]

Registration and temp tags

Tennessee licensed dealers issue temporary dealer drive-out tags (green tags) through the state's EZ-Tag print-on-demand system. Tennessee extended the temporary dealer drive-out tag from 30 days to 60 days.[6] A person who moves to Tennessee from another state should register the vehicle within 30 days of the move. Limited exceptions exist, including out-of-state students attending school in Tennessee.[7]

Bordering states

Cross-border deals from Tennessee most often involve Alabama, Arkansas, Georgia, Kentucky, Mississippi, Missouri, North Carolina and Virginia. The combination decides the outcome, so check both states in the out-of-state checker.

Vehicle-type exceptions

Dealer-installed accessories sold along with a motor vehicle or boat are folded into that vehicle's price for purposes of the single article local tax limitation, rather than being treated as separate articles with their own cap.[8]

Sources

  1. revenue.support.tn.gov/…/360060395571-VTR-34-Sales-Tax-on-a-Vehicle-Purchase · verified 2026-08-23
  2. www.tn.gov/…/auto-dealership-manual.pdf · verified 2026-08-23
  3. revenue.support.tn.gov/…/360059953452-VTR-37-Sales-Tax-on-a-Vehicle-Purchased-out-of-State · verified 2026-08-23
  4. www.tn.gov/…/Rule-Change_4-20-2022.pdf · verified 2026-09-17
  5. revenue.support.tn.gov/…/360059968612-VTR-72-Tax-on-Document-Fees · verified 2026-08-23
  6. www.tn.gov/revenue/title-and-registration/ez-dealer-tags.html · verified 2026-08-23
  7. revenue.support.tn.gov/…/360060097552-VR-6-New-Residents-Should-Register-Within-30-Days · verified 2026-09-17
  8. www.tn.gov/…/single-article-special-tax-rates.html · verified 2026-08-30
Cite this page

“Tennessee Car Sales Tax & Out-of-State Rules.” Voltra. Last verified September 17, 2026. https://voltra.ai/car-sales-tax/tennessee/

More state-by-state guides: trade-in tax credit by state · recent rule changes · all states + the out-of-state checker

Tennessee car sales tax questions

Tennessee taxes vehicle sales at 7% state plus up to 2.75% local (on the first $1,600 of the price only, plus a 2.75% state single-article rate on the portion from $1,600 to $3,200) (depends on location). It applies to the taxable price the desk calculates, and the trade-in and doc-fee rules are what shape that figure.

Tennessee taxes the price after the trade-in is deducted. The trade-in must be of like kind and character and be identified as a trade-in by model and serial number on the customer's invoice, and the credit cannot exceed the sales price of the vehicle being purchased. A Tennessee resident who buys a vehicle in another state and imports it gets no trade-in credit against Tennessee use tax unless the traded-in vehicle was previously registered in Tennessee in that person's name. Because that treatment sets the taxable price, an identical car and trade can owe different tax on either side of a state line.

Tennessee exempts out-of-state buyers only under specific conditions. The buyer has up to three days to remove the vehicle from Tennessee to another state. A Seller/Purchaser Affidavit of Exemption (the 3-Day Affidavit) must be completed naming the city and state the vehicle will be delivered to. A vehicle registered in another state but permanently located in Tennessee does not qualify, and Tennessee residents who sign the affidavit but keep the vehicle in Tennessee can be held liable for tax, penalty, and interest. The exemption runs on Seller/Purchaser Affidavit of Exemption for Motor Vehicles, Trailers, and Boats Sold for Removal from Tennessee Within Three Days (3-Day Affidavit), completed at delivery.

Tennessee credits sales tax legally paid to another state, so the same dollars are not taxed twice. Tennessee credits the sales tax already paid to the state where the vehicle was purchased and collects only the rate difference at registration. Tennessee's state single article tax is still due at registration if it was not already collected.

Tennessee does not cap dealer doc fees by statute. The doc fee is part of the taxable price.

Start with the sale price and subtract the trade-in allowance (Tennessee credits it in full), then multiply by 7% state plus up to 2.75% local (on the first $1,600 of the price only, plus a 2.75% state single-article rate on the portion from $1,600 to $3,200) (depends on location) plus any local add-on. The dealer doc fee is taxable in Tennessee, so add it before you multiply. The Tennessee calculator on this page runs those steps with the verified figures and shows the out-the-door estimate before title and registration fees.