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How Tennessee's single-article rules change how vehicles are taxed
Summary
Webinar presenters walked dealers through Tennessee's single-article tax: full state 7% applies to the whole vehicle price, local tax is limited to the first $1,600, the next $1,600 is taxed at a state single-article rate (2.75%), with examples showing the calculations and county exceptions.
Tennessee's single-article tax alters how local and state sales tax apply to motor vehicles, presenters told dealers during the Department of Revenue webinar. Katie explained that the full vehicle price is subject to the 7% state sales tax, while local tax applies only to the first $1,600; the subsequent $1,600 is taxed at a state single-article flat rate of 2.75%. She noted county exceptions (for example, Hamblen and Hancock) where the local limitation differs.
Using the webinar example for Davidson County (local rate 2.25%), a $35,000 vehicle with a $10,000 trade-in produced a taxable sales price of $25,300; state tax (7%) on that amount was shown as $1,771 and the total vehicle-related tax in the example totaled $1,851 after the single-article breakdown. "The entire item is subject to the state tax in Tennessee, which is 7%," Katie said while stepping through the bill-of-sale example.
