Special thanks to my Loyal Lieutenant, Janelle Beasley, formerly of the Tennessee Department of Revenue, for authoring this insightful article!
It’s that time of year again for Tennessee’s Sales Tax Holiday. This is the weekend where certain clothing, school supplies, and computers are completely sales tax free in the state. This year the tax -free weekend will be Friday July 30, 2021 at 12:01 AM through Sunday August 1, 2021 at 11:59 PM.
There is a twist to this year’s tax free holiday. For the first time, food, food ingredients, and prepared foods will be added to the tax-free holiday and is extended for these sales. This means food purchased from grocery stores, restaurants, food trucks, and caterers will be tax free beginning Friday July 30, 2021 at 12:01 AM and ends Thursday August 5, 2021 at 11:59 PM.
Food and food ingredients are defined by law as liquid, concentrated, solid, frozen, dried, or dehydrated substances that are sold to be ingested or chewed by humans and are consumed for their taste or nutritional value. Food and food ingredients do not include alcoholic beverages, tobacco, candy, or dietary supplements.
Prepared food as defined by law:
- Is sold in a heated state or heated by the seller;
- Contains two or more food ingredients mixed together by the seller for sale as a single item;
- Is sold with eating utensils, such as plates, knives, forks, spoons, glasses, cups, napkins, or straws provided by the vendor.
It is important to note that sales of prepared food are also exempt from sales tax if the payment for the food is made prior to the sales tax holiday and
that food is received by the purchaser during the holiday period.
If the sale of the prepared food is paid for during the sales tax holiday, but delivered on a date after the holiday period, the transaction will remain taxable.
Although these sales will be tax exempt, it is also important to know that these tax exempt sales must still be reported to the TN Department of Revenue on your sales tax return.
This is a great time in Tennessee for all consumers to enjoy the tax-free weekend to gear up for the new school year.
Last modified: July 30, 2021