Tennessee's most popular shopping weekend of the year is 9 days away.
Tennessee's annual sales tax holiday begins at 12:01 a.m. on Friday, July 31, 2026, and ends at 11:59 p.m. on Sunday, August 2, 2026.
This year marks the 20th annual sales tax holiday — a back-to-school tradition that has been running since 2006.
Three days. No state or local sales tax on qualifying clothing, school supplies, and computers. And for a state with the second highest combined sales tax rate in the country, the savings are real.
Clothing and school supplies priced at $100 or less and personal computers priced at $1,500 or less can be purchased without paying state or local sales tax — saving Tennesseans nearly 10% on qualifying purchases.
Here's exactly what qualifies, what doesn't, and what retailers need to do before Friday.
Tennessee doesn't have an individual income tax. It funds its government primarily through sales taxes — and the result is one of the highest combined rates in the country.
Tennessee's general state tax rate is 7%. Combined with local tax rates, that figure rises to 9.55% — making Tennessee the state with the second highest average combined state and local sales tax rates in the country, according to the Tax Foundation. utk
That means the tax-free weekend isn't saving shoppers 6% or 7% — it's saving them close to 10% depending on their county. On a $1,400 laptop, that's $126 to $137 in savings. On a $200 worth of clothing and school supplies, that's $18 to $20. The math works particularly well in Tennessee precisely because the regular rate is so high.
As UT taxation expert LeAnn Luna puts it: "The Tennessee sales tax holiday is a 10 percent sale — actually 9.25% to 9.75% depending on your county — on most clothing, computers, and school supplies. The question for shoppers is: would you buy the item outside the sales tax holiday weekend if the retailer offered it for a 10 percent discount? If the answer is yes, the sales tax holiday provides a good opportunity to purchase the goods."
The threshold is simple: clothing and school supplies priced at $100 or less per item may be purchased tax-free during the holiday weekend. Freetaxweekend
The $100 limit applies per item — not per transaction. A shopper buying ten $95 items pays no tax on any of them.
Qualifying clothing includes a broad range of everyday items:
Belts, caps, coats, dresses, gloves, hats, hosiery, jackets, jeans, neckties, pants, scarves, school uniforms, shirts, shoes, sneakers, socks, and underwear all qualify. Fox 17
Less obvious items that qualify include diapers for both babies and adults, bibs, baby receiving blankets, chef uniforms, and even wedding dresses — as long as they're under $100 and for personal use, not business or trade.
School supplies follow the same $100 threshold. Binders, backpacks, crayons, paper, pens, pencils, rulers, art supplies, and similar school necessities all qualify.
The computer exemption is one of the most valuable parts of Tennessee's holiday — and one of the most frequently misunderstood.
Computers priced at $1,500 or less may be purchased without paying state or local sales tax. That covers laptops, desktops, and tablets used for personal purposes. Freetaxweekend
Many related items do not qualify: printers, printer supplies, printer paper, storage drives, software sold separately, computer games, and smartphones do not qualify for the sales tax holiday.
The computer exemption is per unit — a $1,400 laptop qualifies entirely. A $1,600 laptop is fully taxable — there's no partial exemption above the threshold.
This is where shoppers and retailers need to be precise — and where compliance errors happen most often.
Items that do not qualify include jewelry, handbags, sports and recreational equipment, computer software sold separately, printer supplies, and household appliances. Freetaxweekend
A few specific items worth calling out:
Clothing accessories are excluded — belt buckles sold separately, briefcases, cosmetics, hair accessories, handbags, patches and emblems sold separately, sunglasses, umbrellas, and wallets are all taxable during the holiday.
Protective equipment doesn't qualify — breathing masks, face shields, hard hats, and safety vests are taxable.
Sports equipment is fully taxable — athletic pads, cleats and athletic shoes designed primarily for sport, golf bags, helmets, and similar items remain taxable even during the holiday. Note the distinction from everyday shoes: sneakers and shoes worn as regular footwear qualify, but shoes designed primarily for athletic activity don't.
Business purchases are fully taxable. The exemption applies to personal use only — a business owner buying computers or supplies for their company doesn't qualify even during the holiday weekend.
Items sold together cannot be split up to stay below the $100 maximum. Wate
A pair of shoes priced at $130 is fully taxable — you can't sell the left shoe for $65 and the right shoe for $65 to qualify. A matching outfit sold as a set for $180 is taxable even if individual pieces might cost less than $100 each when separated.
The rule is straightforward: the price as sold determines taxability. Retailers cannot restructure bundles or split items during the holiday weekend to manufacture qualifying prices.
Qualifying items may be purchased online and in stores. Freetaxweekend
For ecommerce sellers, the qualifying window is the same as for physical stores — orders placed and paid for between 12:01 a.m. Friday, July 31 and 11:59 p.m. Sunday, August 2 qualify for the exemption. Delivery after the holiday weekend doesn't affect eligibility — the transaction date determines taxability.
Tennessee's holiday is one of the few that explicitly covers both state AND local taxes. Most state holidays waive the state portion only, leaving local taxes in place. Tennessee waives both — making it a complete exemption on qualifying items during the window.
Items placed on layaway during the holiday also qualify. Fox 17
A shopper who puts a $90 pair of shoes on layaway on Saturday, August 1 — even if they don't pick them up until September — pays no tax on that purchase. The layaway placement date during the holiday determines the tax treatment.
Participation in Tennessee's sales tax holiday is not optional for retailers selling qualifying items.
Stores that sell eligible items such as clothing, school supplies, and computers are required to participate if they are open during the holiday weekend. If a store or merchant sells only to other businesses or does not sell qualifying items, participation is not required.
That mandatory participation rule extends to ecommerce sellers with Tennessee sales tax nexus. If you're registered in Tennessee, sell qualifying items, and process orders during the July 31 – August 2 window, you must apply the exemption. Continuing to collect Tennessee sales tax on qualifying items during the holiday creates over-collection liability.
Tennessee's tax-free weekend gets extra attention this year because of what didn't happen in the 2026 legislative session.
We covered Tennessee's grocery tax story earlier this year — lawmakers from both parties filed more than a dozen bills to eliminate or reduce Tennessee's 4% grocery tax, but the 2026 budget passed without any grocery tax changes. Tennessee remains one of only about ten states that still impose a statewide sales tax on groceries.
The tax-free weekend is the legislature's most visible tax relief tool — three days of savings that generates genuine goodwill and media coverage, without the $800 million annual revenue impact of eliminating the grocery tax entirely.
Revenue Commissioner David Gerregano put it plainly: "Tennessee's sales tax holiday has become a back-to-school tradition for families." Tennessee Department of Revenue
It has. But for families buying groceries year-round in a state with the second highest combined sales tax rate in the country, a weekend off on clothing and school supplies is a modest benefit compared to what a permanent grocery tax change would deliver.
Nine days. Here's the compliance checklist for Tennessee retailers and ecommerce sellers:
1. Confirm your system applies the exemption to both state and local taxes. Tennessee's holiday waives both layers — not just the 7% state rate. Your POS or ecommerce tax engine needs to zero out the full combined rate on qualifying items, not just the state portion.
2. Verify the $100 clothing and supplies threshold applies per item. Configure your system to evaluate each line item independently — not the transaction total.
3. Verify the $1,500 computer threshold. Laptops, desktops, and tablets under $1,500 qualify. Peripheral equipment, software, and smartphones don't. Make sure your product taxonomy correctly separates qualifying computers from non-qualifying accessories.
4. Handle online orders correctly. Orders placed and paid for during the July 31 – August 2 window qualify — regardless of when they ship. Configure your ecommerce platform to apply the exemption based on order date, not fulfillment date.
5. Review bundle and set pricing. If you sell clothing sets, uniform bundles, or computer packages, verify that the bundled price doesn't push the item above the qualifying threshold — and confirm your system isn't splitting bundles to manufacture a qualifying price.
6. Train your staff. The most common customer service issues during a tax holiday involve items customers expect to qualify but don't — handbags, sports equipment, accessories, smartphones. Make sure your team knows the answers before the holiday starts.
At Tennessee's average combined rate of approximately 9.55%, here's what shoppers save on a typical back-to-school haul:
| Item | Price | Tax Saved at 9.55% |
|---|---|---|
| Laptop | $1,299 | $124.05 |
| Back-to-school outfit | $85 | $8.12 |
| Sneakers | $75 | $7.16 |
| School supplies | $65 | $6.21 |
| Kids' clothing | $120 across 3 items | $11.46 |
| Full family haul | $1,800 | $171.90 |
A family buying a laptop and a full back-to-school wardrobe during the holiday saves close to $170. That's genuine, meaningful relief in a state where the regular rate is among the highest in the country.
For a full overview of every state's 2026 back-to-school sales tax holiday — including the massive August 7-9 weekend when Iowa, Ohio, Texas, Missouri, Oklahoma, South Carolina, and Virginia all run holidays simultaneously — visit our complete 2026 sales tax holiday guide.
Selling into Tennessee and want to confirm your systems are applying the correct exemption for the July 31 – August 2 holiday — or managing back-to-school holiday compliance across multiple states this summer? Book a free consultation with our team at sales.tax. We'll audit your holiday compliance setup and make sure you're collecting correctly through the entire back-to-school season.