Tennessee Motor Vehicle Sales Tax Exemptions for Service Members and Disabled Veterans

The duty-status exemption. Section 67-6-303(a) exempts from sales and use tax "the sale or use of a motor vehicle that is registered in this state in accordance with title 55" sold to: (1) "A member of a uniformed service in active military service of the United States, as defined in § 58-1-102, who is stationed in this state or at a military reservation located partially within the boundary of this state and that of another state under orders of the member's branch of service"; (2) a Tennessee National Guard or reserve member in the Active Guard and Reserve program on the same stationing terms; or (3) a Guard or reserve member called into active military service and stationed in a combat zone, from the orders assigning the member there until ninety days after the orders releasing the member. Fort Campbell straddles the Tennessee and Kentucky line, and the shared-reservation clause is why a soldier assigned there is inside the exemption whichever side the housing is on. The Department of Revenue's tax manual for military members (revised April 2026) adds that Guard and reserve members stationed in Tennessee on Title 10 orders qualify under (1). The conditions. The purchaser gives the seller, or the county clerk, a copy of the official stationing orders and, if relevant, proof of AGR status, which the seller keeps (subsection (b)). Subsection (c): the exemption applies "only when the vehicle is titled and registered in the name of the qualifying individual, either alone or jointly with a spouse or lineal relative" (the Department counts parents, children and grandparents and adopted children, not stepchildren). A vehicle registered in a home of record state is outside the section. The Department: veterans, as no longer serving, are not eligible for this exemption. What a disabled veteran gets. Two other exemptions do reach a disabled veteran. First, the VA automobile grant: "Effective March 5, 2018, the portion of the automobile price that is in excess of a Veterans Affairs (VA) Automobile Grant is exempt from sales and use tax. The portion of the price of the automobile that is paid with the VA grant awarded to a qualified service member or veteran is subject to sales tax" (Department of Revenue Notice 18-15, on Public Chapter 541 of 2018). The grant recipient is also exempt from the local motor vehicle privilege tax (wheel tax) and the State registration fee, though not from titling and issuance fees. Give the dealer or county clerk the VA Form 21-4502 signed by VA. Second, automobile adaptive equipment "necessary to ensure safe operation of an automobile is exempt from sales and use tax when sold or given to an honorably discharged disabled veteran who has a service-connected disability under 38 U.S.C. § 3901" (67-6-353; the seller keeps VA Form 10-1394 or 21-4502). Neither is a general sales tax break for a disabled veteran buying an ordinary car.