Tennessee allows for an exemption of sales tax on industrial machinery purchased by a qualified manufacturer or processor. The industrial machinery must be necessary to and primarily used for the fabrication or processing of a product for resale and consumption off the premises.

Tennessee does not recognize the use of exemption certificates issued by other states, except for resale certificates for purposes of making tax-exempt purchases in Tennessee for resale outside of Tennessee to end users located outside of Tennessee.

Income tax is generally levied at a state-level on the income you earn within a tax year. Yet, Tennessee is one of several states that doesn't levy a state-level income tax on personal income. Business income and real property taxes as well as sales taxes are levied in Tennessee.

Certain entities under specific circumstances are exempt from paying the business tax. These may include, but are not limited to, people acting as employees, manufacturers, religious and charitable entities selling donated items, direct-to-home satellite providers, and movie theaters.

§ 67-6-322 wishing to register for a nonprofit sales and use tax exemption certificate should use the Application for Exempt Organizations or Institutions. This application can be found on the Department's website at .tn.gov/revenue.

You can file for an exemption using the Tennessee Taxpayer Access Point (TNTAP), without creating a logon. Visit TNTAP for more information. Seventeen different types of entities are exempt from the franchise and excise taxes.

Sales and Use Tax Certificate of Exemption This organization or institution qualifies for the authority to make sales and use tax exempt purchases of goods and services that It will use, consume or give away. This authorization for exemption is limited to sales made directly to the referenced organization.