Tennessee Contractor Sales Tax 2026

Tennessee sales tax rate for contractors

• Combined rate: 7% + local (~9.5% combined avg, highest base in US)
• Construction labor taxable: NO - real property labor is exempt
• Tax authority: Tennessee Department of Revenue

How Tennessee treats contractor labor

Real property labor exempt. Tennessee has some of the highest combined state+local sales tax rates in the US.

Tennessee-specific rules

License required for projects over $25K (residential) or any commercial work. Some of highest combined sales tax in US.

Tennessee mechanics lien rights

Beyond sales tax, Tennessee contractor billing must respect the mechanics lien deadline of 90 days from last work. Preliminary notice: Notice of Nonpayment required for liens by non-prime contractors.

Tennessee contractor licensing

Tennessee Board for Licensing Contractors - required for licensed work. $250 + exam + financial statement. Board: https://www.tn.gov/commerce/regboards/contractor.html.

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Tennessee contractor resources by trade

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