Skip to main content
Avalara Help Center

Why is my Tennessee transaction taxing different than expected?

Overview

My Tennessee transaction is not calculating the way I expected and need to know why.

Environment

Avalara Avatax

Resolution

Check to make sure that the Tennessee Single Item Tiered Tax isn't coming into play:

 

AvaTax handles the Tennessee single article tax as follows. Three calculations are made when calculating sales tax in Tennessee: 1) State tax, 2) Local tax and 3) Single article tax

 
State tax rate of 7% is applicable to all amounts.
Local tax rate between 2.25%  and 2.75% is applicable between $0-$1600 for all items. (This rate is dependent on the local city or county rate.)
 
State single article tax rate of .0275% is applicable for all single items between $1600-$3200.
 
Example: Single item sold for $4000 to Nashville
 
State tax: $4000 x .07 = $280
Local tax: $1600 x .0225 = $36
Single Article tax: $1600 x .0275 = $44
 
Total tax: $360
 
Example: Two items sold for $2000 each to Nashville
 
State tax: 2 * ($2000 x .07) = $280
Local tax: 2 * ($1600 x .0225) = $72
Single Article tax: 2 * ($400 x .0275) = $22
 
Total tax: $374
  • Was this article helpful?