Motor carrier taxes - Tennessee

Sales & use taxes

Tennessee imposes a sales and use tax within the state. Tennessee does allow credit for sales and use tax already paid to another state, provided it is equal to or greater than the Tennessee tax liability. If the other state has a lower sales tax rate than Tennessee, then only the difference will be owed.

Tennessee law allows a buyer purchasing a motor vehicle within the state up to three days to remove the motor vehicle to another state without having to pay sales and use tax on the purchase. Retail sales of boats, motorboats, and other vessels subject to registration within Tennessee that are removed from the state to another state within three days after purchase are also tax exempt.

Qualified common or contract carriers are exempt from sales tax on the purchase of motor vehicles with a gross vehicle wheel rating of Class 3 (16,000 pounds) or above, as well as trailers, semitrailers, and pole trailers that will be used to transport passengers and cargo principally — more than 50 percent of the operational time of the motor vehicle — in interstate or foreign commerce. The purchaser must provide a copy of the common or contract carrier designation and must complete the Application for Sales Tax Exemption for Interstate Commerce Motor Vehicles and Trailers.