Tennessee law outlines the requirements for military service based tax exemptions.
Under Tenn. Code Ann 67-6-303(a)(1), in order to purchase a motor vehicle tax exempt, one of the requirements is, the military member must be stationed in Tennessee or a military reservation located partially within Tennessee. New or used vehicles sold, given, or donated to a disabled veteran or active-duty service member who receives a U.S. VA grant, are exempt from sales tax for the portion of the vehicle price in excess of the U.S. VA grant. These service members are also exempt from the motor vehicle privilege tax and registration fee. More details of this can be found in the Sales and Use Tax Notice #18-15.
Veterans Affairs (VA) Automobile Grant