OverviewA textured 3D topographic rendering of the state of Tennessee in warm earth tones, showing raised ridges for the Appalachian Mountains and Cumberland Plateau, with the words “Tennessee Cannabis Tax Guide (CBD Only)” in large, bold white letters centered over the map.

This guide explains how Tennessee treats hemp‑derived CBD products for tax purposes.

How Tennessee Taxes CBD Products

Excise Tax

Tennessee does not charge a special cannabis excise tax on CBD products. All hemp‑derived goods are treated like any other retail item.

Sales Tax

State Sales Tax

  • Rate: 7.00% on the retail price of CBD products.

Local Sales Tax

  • Range: 0% to 2.75%, set by each city or county.

  • Typical Maximum: Most places add 2.75%, for a combined top rate of 9.75%.

Examples of Local Totals

  • Nashville (Davidson County): 7.00% + 2.75% = 9.75%

  • Knoxville (Knox County): 7.00% + 2.25% = 9.25%

How to Calculate Your Tax

  1. Find your combined rate (state 7.00% + local).

  2. Multiply that rate by your sale price.

  3. That total is the sales tax you must collect.

Key Deadlines and Filing

Filing Frequency

  • Monthly: If your tax bill is high enough, you file every month.

  • Quarterly: If your bill is moderate, you can file every three months.

  • Annually: Small sellers may qualify to file just once a year.

Monthly Filing

  • Due Date: 20th day of the next month.

Quarterly Filing

  • Due Dates:

    • Q1 (Jan–Mar) → April 20

    • Q2 (Apr–Jun) → July 20

    • Q3 (Jul–Sep) → October 20

    • Q4 (Oct–Dec) → January 20

Annual Filing

  • Due Date: January 20 for the prior calendar year.

How to File

  • Portal: MyTNTAP (online only; no paper forms).

  • Form: Sales and Use Tax Return.

Zero‑Sales Filings

Even if you have no sales in a period, you must file a return.

Penalties for Late or Missing Filings

  • Late Penalty: 1% of the unpaid tax per month (up to 12%).

  • Interest: Accrues on any unpaid balance.

  • Other Risks: Fines, loss of registration, or audit.

Step‑by‑Step Tax Calculation

  1. Determine combined rate: State (7.00%) + local.

  2. Apply rate to your product’s retail price.

  3. Collect that total tax at checkout.

  4. Report and pay by the 20th of the next period.

Industry Groups to Join

Hemp Industries Association – Tennessee Resources

Offers advocacy and best‑practice updates for hemp businesses.

Southern Hemp Coalition

Provides regional policy news and networking.

National Hemp Association

Tracks federal rules and hosts national events.

Who to Contact

Tennessee Department of Revenue

  • Sales Tax Help: (800) 342‑1003

  • Sales and Use Tax Rate Lookup Tool

  • Nashville & Out‑of‑State: (615) 253‑0600

  • Address: Andrew Jackson State Office Bldg, 500 Deaderick St, Nashville, TN 37242

2025 Cannabis Tax Financial Calendar

Tax Type Rate / Details Who Pays Filing Frequency Due Date
Sales & Use Tax 7.00% state + 0–2.75% local CBD retailers Monthly/Quarterly/Annual 20th day after period
Corporate Income Tax 6.5% flat rate Corporations¹ Annual April 15
Excise Tax N/A — — —

¹ Hemp businesses can deduct normal expenses; regular cannabis businesses cannot under IRC §280E.

Disclaimer

This guide is for informational purposes only. Always check with a CPA or the Tennessee Department of Revenue for the very latest rules.  Consult a professional before making any tax, compliance, or business decisions.