Tennessee Announces Three Sales Tax Holidays for 2021
The Tennessee General Assembly has approved three sales tax holidays for 2021, which include the traditional three-day weekend for back-to-school supplies, an added week-long break on food tax, and a year-long opportunity to save on gun safety equipment.
Tennessee's traditional sales tax holiday on clothing, school supplies and computers begins this year at 12:01 a.m. on July 30, 2021 and ends at 11:59 p.m. on Aug. 1, 2021.
The Department of Revenue recently issued Important Notice #21-10, 2021 Sales Tax Holiday for Food, Food Ingredients, and Prepared Food. The notice, effective July 1, creates a new sales tax holiday for the week beginning 12:01 a.m. on July 30, 2021 and ending at 11:59 p.m. on Aug. 5, 2021. During this period, food, food ingredients and prepared food products may be purchased tax free.
The notice defines “food and food ingredients” as liquid, concentrated, solid, frozen, dried or dehydrated substances that are sold to be ingested or chewed by humans and are consumed for their taste or nutritional value. Food ingredients do not include alcoholic beverages, tobacco, candy, dietary supplements and prepared food.
A food item is considered “prepared food” if it meets one of the following qualifications:
- It is sold in a heated state or heated by the seller;
- It contains two or more food ingredients mixed together by the seller for sale as a single item; or
- The vendor who sells it also provides eating utensils, such as plates, knives, forks, spoons, glasses, cups, napkins or straws.
Sales of food, food ingredients or prepared food are also considered exempt if:
- The payment for the food is made prior to the sales tax holiday period; and
- The food is received by the purchaser during the holiday period.
The Tennessee Department of Revenue also recently issued Important Notice #21-13, Sales Tax Holiday for Gun Safes and Gun Safety Devices. Public Chapter 592 (2021), effective July 1, creates a new one-year sales tax holiday for the period beginning 12:01 a.m. on July 1, 2021 and ending at 11:59 p.m. on June 30, 2022. During this period, retail sales of gun safes and gun safety devices are exempt from sales and use tax.
The notice defines a “gun safe” as a locking container or other enclosure equipped with a padlock, key lock, combination lock or other locking device that is designed and intended for the secure storage of one or more firearms. A “gun safety device” is defined as any integral device to be equipped or installed on a firearm that permits the user to program the firearm to operate only for specified persons designated by the user through computerized locking devices or other means integral to and permanently part of the firearm.
This exemption will only be available for the one-year holiday period. All retail sales of gun safes and gun safety devices made after June 30, 2022 will be subject to sales tax.
For more details on the traditional sales tax holiday, including an alphabetical list of items that are exempt, visit the Department of Revenue website.
Proper reporting of sales made during the three sales tax holidays is required of all vendors.
For more information, visit the Department of Revenue website.