Sales Tax 101 Shipping States UT

Is Shipping Taxable in Utah?

by Mark Faggiano

Utah Shipping Taxability

Most sellers have struggled with sales tax at one point or another in their business. It can be difficult to navigate all of the rules for when it is applied, especially when those rules change depending on what state you are in. When you get down to detailed subject like whether to charge sales tax on shipping and handling, you might feel like you may never understand sales tax. We are here to help! Today, we look at whether online sellers need to charge sales tax on shipping charges in Utah.

Is Shipping Taxable in Utah?

Here is what the Utah State Tax Commission tells us about sales tax.

Utah shipping and handling

So it appears to be pretty easy to avoid paying sales tax on shipping and handling. A seller must just list those charges separately on the invoice and not incorporate them into the purchase price of the property.

The only shipping-related matter that is taxable under Utah law are charges for “freight-in,” which is defined  as shipping, freight, or transportation charges billed to the seller as part of the seller’s cost of the merchandise and are taxable.

Utah Shipping Summary

You will not charge sales tax on shipping and handling in Utah.

As a seller, you will not have to charge sales tax on shipping and handling if those charges are listed separately on the invoice.

Still have questions? Put them in the comments!

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  • Chris

    Does this rule of listing the items separately, not charging tax on shipping apply to network marketing companies?

    Which of these would be correct for a NM company in Utah?

    PRODUCT 1 price $15.
    PRODUCT 2 price $20.
    SHIPPING $6.
    TAX ON PRODUCT $1.75
    TAX ON SHIPPING $.30

    PRODUCT 1 price $15.
    PRODUCT 2 price $20.
    SHIPPING $6.
    TAX ON PRODUCT $1.75
    TAX ON SHIPPING $0

    From what I am understanding the second one is correct. If they were to include shipping the in Product cost, then tax for shipping would have to be collected. Such as:

    PRODUCT 1 price $18.
    PRODUCT 2 price $23.
    TAX $2.05

    I need examples. lol. Thanks!

  • Hi Chris, GREAT question! I recommend you ask here in our Facebook group: https://www.facebook.com/groups/SalesTax4EcommerceSellers/

    We have over 3500 sellers and CPA members and they can definitely help!

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