Most of Tennessee’s sales tax goes toward education

Published 11:53 am Monday, January 8, 2024


The state of Tennessee spent 43% of the state sales tax on education last fiscal year and 56 cents of every dollar of state and local sales tax went to education in that same span.

Sales tax accounts for most of both state and local tax collections in Tennessee. The state collected $13.8 billion in sales tax of the $22.0 billion it collected. There was $4.3 billion in local sales tax collected out of nearly $4.7 billion in total collections over that same span, according to the Tennessee Department of Revenue’s Annual Report.

Tennessee’s tax and fee collections were up from $20.9 billion in fiscal year 2022 while sales and use taxes increased from the $12.8 billion collected that year.

For every $1 of sales tax collected overall in the state, 56 cents goes to education with 28 cents to the state’s general fund and 16 cents to local governments.

That’s $7.8 billion of the total $18.1 billion going to education with $5.1 billion for Tennessee’s general fund, $4.2 billion for counties and $666.8 million going to the city it is collected in.

Another $104.1 million go to Tourist Development Zone tax captures, $18.4 million to the Border Region Tourist Development Zone near East Ridge and $1.2 million to a special zone.