GA Sales Tax 101 Shipping

Is Shipping in Georgia Taxable?

by Mark Faggiano

Georgia shipping taxability

One of the sticky points about collecting sales taxes in more than one state is determining if a state where you have sales tax nexus requires you to collect sales tax on shipping and/or handling charges.

Finding out information like this can be a nightmare as state websites seem like they’re purposely hiding everything. It’s not much of a treasure hunt!

Georgia is one such state that tends to hide everything on its website. Luckily for you we found everything you need to know about taxes when it comes to shipping. Here’s a run-through according to what is found on the Georgia Department of Revenue website.

Sales Tax on Shipping in Georgia

The rules for sales tax on shipping in Georgia are found in the “Rules of Department of Revenue Sales and Tax Division” paper under “Freight, Delivery, and Transportation.” Here’s what it says about basic shipping:

“Delivery charges” means charges by the seller of tangible personal property or services for preparation and delivery to a location designated by the purchaser of the tangible personal property or services, including but not limited to charges for transportation, shipping, postage, handling services, crating, and packing; fuel surcharges; split shipment charges; small order charges; and other similar charges. The term “delivery charges” does not include postage charges for the delivery of direct mail when the postage charge is passed on dollar-for-dollar without being marked up to the purchaser of the direct mail and separately stated on an invoice or other similar billing document given to the purchaser.”

Basically, they’re going into detail that, yes, you have to charge sales tax for shipping costs. They break it down by describing the shipping process and costs down so there’s no confusion. So fuel, crating, postage, and whatever else it takes to get that item from Point A to Point B counts as “shipping.”

The next part of the document says:

“Where taxable tangible personal property is sold at retail and the seller makes a delivery charge, the charge is taxable regardless of whether the charge is optional (i.e., not required to complete the underlying sale of the tangible personal property) or separately stated.”

This part of the document basically says that no matter how the item is packaged with the shipping costs, if you charge for shipping you need to collect sales tax on it. This includes if the sales tax is included in the cost OR if it’s separately stated. Also, even if the shipping charge is optional Georgia STILL wants you to collect on it.

While there’s further breakdown, these two points on the document make sure you know that shipping is absolutely taxable in Georgia IF the product you are selling is taxable.

What if the Product You are Selling Isn’t Taxable?

If the product you are selling isn’t taxable, then shipping also isn’t taxable. But if you are sending a mixed shipment (some products are taxable and some are not) then you have two options:

  1. Charge sales tax on the entire amount of shipping fee collected
  2. Charge sales tax on just the percentage of the shipment that is taxable (you can determine this amount either by weight or by price)

In most cases, shipping in Georgia is taxable. Check out our Georgia Sales Tax Guide for Business to find out more about sales tax in Georgia.

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  • Gene Meyer

    Hi Mark. I appreciate the statement of facts as presented by the state, and then the translation into certainty. I still have a question, however. What if what you are shipping is not sold at retail? What if the items you ship don’t even belong to you? We are an Authorized Fedex Shipper and FedEx doesn’t want to give tax advice, so I’m at a loss. We do mark up the shipping rates, of course, but are entitled to such low rates that often our customers can ship through us cheaper than if they had their own Fedex account. So…I fit a half truth for each condition it seems. Does two halves still make a whole???

    • Hi Gene,

      That’s a new one on me and I’m not qualified to give you advice there. One of our vetted accounting partners, Windward Tax, is located in Georgia, though, and I know they can help. This is their website: http://www.windwardtax.com. I hope this helps point you in the right direction!

  • GKOP

    What if u charge less than actual shipping cost. We often charge a nominal fee to offset burden of shipping… Rarely, does it actually cover the shipping cost and ecen less frequently exceed.

    How does that affect the tax rules?

    • Unfortunately, yes. Their law is pretty explicit that all shipping charges are taxable.

  • Doug Smith

    The last part of the first quoted section makes it sound like postage that is not marked up doesn’t count. Am I reading that right or does that part about “direct mail” just mean direct mail as in bulk envelopes and not shipping products?

    • From my conversations with the Georgia Department of Revenue, shipping is essentially always taxable when it comes to selling items online. That section, to the best of my knowledge, only refers to direct mail.

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