Out-the-door price in Tennessee
How Tennessee works
- Registering the car: in Tennessee the dealer usually files your title and registration with the county clerk and collects the fees at the sale. A 60-day temporary tag covers you, and the clerk mails the plate. If you buy from a dealer outside your county, your own clerk may collect your wheel tax. The calculator includes the title, registration and county fees either way.
- Tennessee tax has three layers. The state charges 7% on the whole price. Your local tax, 2% to 2.75%, applies only to the first $1,600. A second state tax of 2.75% covers the next $1,600 and adds at most $44. A car over $3,200 pays at most $44 of local tax and $44 of single article tax on top of the 7%.
- The local rate follows where the dealer is located, not where you live. The calculator uses the rate for the ZIP you entered, which is right when you buy near home. Davidson County's rate is 2.75% since February 1, 2025 (2.25% plus a 0.5% transit surcharge). Portland's rate became 2.75% on August 1, 2026.
- In Hamblen County outside Morristown, local tax applies only to the first $300 of the price. In Hancock County it is the first $375. The calculator does not model that yet, so it overstates local tax there by up to about $36.
- Your trade-in reduces the taxable amount, on new and used cars, with no dollar limit. It has to be a like-kind trade, a vehicle for a vehicle, and the invoice has to list it by model and serial number. The credit cannot be more than the price of the car you buy.
- Manufacturer rebates are taxed: tax is figured on the price before the rebate. A discount the dealer gives from its own price does lower your taxable amount.
- The doc fee has no cap in Tennessee. It is taxed, and it is part of the car's price for the single article calculation.
- Service contracts, extended warranties and maintenance plans are taxed at the full state plus local rate, with no $1,600 limit, so 9% to 9.75%. GAP is not taxed when it is listed separately. The calculator's F&I box cannot tell them apart, so a GAP-only total reads about 7% too high in tax and a service contract is under-taxed by its local share.
- Accessories the dealer installs before the sale are part of the car's price. A dealer may also pass its own business tax on to you as a separate line. That line is taxed too, and it is not a government charge.
Rules last verified Oct 11, 2026. Our methodology.
Try it for your ZIP
What a Tennessee advertised price has to include
Tennessee's Motor Vehicle Commission rule requires a dealer's advertised price to include factory options, freight and dealer-installed accessories, but it has the dealer state that the doc fee and any other dealer-imposed fee are NOT in the price. The FTC expects more: every fee the dealer requires, the doc fee included, belongs in the advertised price, so only government charges like sales tax, title and registration can be added on top. That still isn't your out-the-door number; the calculator above adds the rest for your ZIP.
Federal law comes first
The FTC requires a dealer's advertised price to include every fee the dealer charges. Only charges the government requires you to pay, like tax, title and registration, can be left out. Where a state's rules let a dealer leave a fee out, the dealer still has to follow the federal rule, so the fee goes in. The FTC says a state's doc-fee rules can add disclosures, but they don't change the price that has to be advertised. Read the FTC's guidance.
Tennessee's advertising rule and the FTC conflict on the doc fee
Since April 20, 2022, Tennessee's rule has dealers state that the doc fee and any other dealer-imposed fee are not included in the advertised price, and list the amount separately. The FTC expects every fee a dealer requires to be in the advertised price. Until regulators or the courts settle it, you will see Tennessee ads that leave the doc fee out. Ask whether a price includes it, and get the out-the-door price in writing.
What the FTC expects in the advertised price
- The doc fee (Tennessee has no cap), whatever the dealer calls it
- Freight (destination) charges and factory-installed options
- Dealer-installed accessories, which Tennessee's own rule already requires
- The temporary tag, about $8.50, because the dealer pays for it and passes it on
- Any other fee the dealer imposes, by any name, including a pass-through of the dealer's business tax
Can still be added on top
- Sales tax: 7% state, plus your local tax on the first $1,600 and the 2.75% state single article tax on the next $1,600
- The title fee ($14), the registration fee ($26.50), the county clerk's fee and your county's wheel tax
- The $11 lien fee if you finance, and the $5 tire environmental fee on a new car
- Optional products you choose to buy, such as a service contract or GAP coverage
- What the state rule says: an ad has to state that optional equipment, the doc fee and any other dealer-imposed fee, and taxes, tags, registration and title fees are not in the price, and has to list the dealer's fee and its amount separately. Before April 2022 the rule put the doc fee inside the price.
- The doc fee: the statute lets a dealer charge a "document preparation fee, processing fee or servicing fee." It has to be separately stated and conspicuously disclosed on the face of the sales contract before you sign, and the dealer cannot say it is required by or paid to a government agency. There is no dollar cap. It is subject to sales tax.
- New vehicles: the advertised price has to include the MSRP, factory options, factory transportation costs and dealer-installed accessories. An ad may say a new car is discounted only from the MSRP on the Monroney label.
- What can't be in the price: a trade-in allowance, a down payment or any other funds you would have to pay to reach the number. A manufacturer rebate that every buyer qualifies for can be used, if the ad says so.
- Price honoring: an advertised price stays good for five days after the last day the ad ran, unless the ad gives an end date.
More in our guide: Do dealers have to put fees in the advertised price? What actually changed for 2026
See every state: Which states let dealers leave the doc fee out of the advertised price?
Tennessee in detail
Rates by county in Tennessee
Counties where the rate differs from the rest of Tennessee, or changes from one city to the next. The 21 listed here are the ones where your county actually changes the number.
| County | Combined rate | ZIPs |
|---|---|---|
| Shelby County | 9.25%–9.75% | 87 |
| Montgomery County | 9.5% | 13 |
| Roane County | 9.5%–9.75% | 8 |
| Washington County | 9.5% | 12 |
| Cheatham County | 9.25%–9.75% | 11 |
| Claiborne County | 9.25% | 12 |
| Fayette County | 9.25%–9.75% | 17 |
| Franklin County | 9.25% | 12 |
| Hamilton County | 9.25% | 35 |
| Knox County | 9.25% | 37 |
| McNairy County | 9.25% | 15 |
| Monroe County | 9.25%–9.75% | 10 |
| Sequatchie County | 9.25%–9.75% | 3 |
| Stewart County | 9.25%–9.75% | 8 |
| Sullivan County | 9.25%–9.5% | 20 |
| Sumner County | 9.25%–9.75% | 13 |
| Tipton County | 9.25%–9.75% | 11 |
| White County | 9.25%–9.75% | 5 |
| Loudon County | 9%–9.5% | 9 |
| Morgan County | 9%–9.75% | 13 |
| Smith County | 9%–9.75% | 16 |
Tennessee OTD questions, answered
Does a trade-in reduce sales tax in Tennessee?
Yes — Tennessee taxes the difference: your trade-in's value is subtracted before tax is computed.
Are manufacturer rebates taxed in Tennessee?
Effectively yes — tax is computed before the rebate is applied, so you pay tax on the pre-rebate price.
Is the doc fee capped in Tennessee?
No — doc fees are uncapped in Tennessee; buyers report a typical $692.00. It's negotiable as part of your total OTD.
What does a Tennessee dealer's advertised price have to include?
Every fee the dealer requires, including the doc fee (the FTC's position; Tennessee's rule has dealers leave the doc fee out and list it separately, so the two conflict). Only sales tax, title, registration and other government fees can be added on top.
Is there a cap on the doc fee in Tennessee?
No. Tennessee law lets a dealer charge a document preparation, processing or servicing fee, but sets no dollar limit. The fee has to be separately stated on the sales contract and disclosed before you sign. It is taxed.
Which local sales tax rate applies when I buy a car in Tennessee?
The rate where the dealer is located, not where you live. It is 2% to 2.75% on the first $1,600 of the price. The state's 7% tax applies to the whole price, and a 2.75% state single article tax covers the next $1,600.
Do I pay sales tax at the dealership in Tennessee?
Yes. The dealer collects it and sends it to the Department of Revenue. The dealer also collects the title and registration fees and files them with the county clerk, while a 60-day temporary tag covers you.