I grow hemp in Tennessee. I then take the hemp and produce creams, oils, and other products from the hemp. Are these products subject to state tax?

The Tennessee Department of Agriculture is the state agency that regulates hemp growers. You can find information about when it is legal to grow hemp on their website at https://www.tn.gov/agriculture/farms/hemp-industry.html.

The sale of hemp or products that are derived from hemp, such as extracted oil with no additives, are not subject to sales tax or business tax in Tennessee when they are sold by the hemp grower/farmer, as they are considered agricultural products.  Sales of creams, oils containing additives, and other products made out of hemp that you grew are subject to sales tax and business tax whenever other ingredients are added to these products. The products are not exempt for medical purposes from either tax. 

Businesses that are corporations or LLCs are also subject to Tennessee’s franchise and excise taxes.

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