Congrats! You just made a sale in Florida. Maybe you live in the Sunshine State, or perhaps you sell through Amazon FBA and now have sales tax nexus. No matter what, you know you have to collect sales tax from your customer.
But are the shipping and handling charges you collect from the buyer also taxable? We took a look:
Sales Tax on Shipping in Florida? It Depends…
Unfortunately, there is no straight answer when it comes to shipping in Florida. Most of the time, shipping IS taxable, and you must collect sales tax on this charge and figure it into your calculations.
There are exceptions, though, which complicate things. In fact, if your order meets two separate criteria, then shipping is NOT taxable. These two criteria are:
– The charge is separately stated on a bill or invoice
– The charge can be avoided by a decision or action solely on the part of the purchaser
In other words, if your customer decides to take matters into their own hands and drive to pick up the item AND you had already listed the shipping charge separately on the invoice, the charge is not taxable. On top of that, though, if you even PRESENT the option for them to come pick it up, it’s not taxable.
So let’s say you have a business that sells Halloween decorations in Jacksonville. A customer who lives in Jacksonville buys a spooky skeleton. You give them the option to pick the item up and list the shipping separately. Whether or not they actually pick it up, the shipping cost is NOT taxable.
However, another customer from Miami also buys a spooky skeleton. There is no real way for them to pick it up so you don’t give them the option. Even though you listed the shipping cost separately, it IS taxable.
Further, in our understanding, if you sell through a fulfillment service like FBA, the shipping and handling charges aren’t separated out and there’s no way for your customer to pick up the item, so shipping in Florida is taxable for FBA sellers.
Here it is straight from the horse’s mouth:
Summary of Sales Tax on Shipping in Florida
So to simplify, for the vast majority of sales when you have nexus in Florida, you should collect sales tax on shipping. There are a few exceptions, though, and you must meet two criteria: list the shipping separately on the bill, and you must give the purchaser the chance to pick the item up themselves. Whether or not they actually pick it up is irrelevant; if there’s a way for them to pick it up, shipping is not taxable. If there’s no way you could pick it up and you don’t offer them the chance, shipping is taxable and must be collected.
Have questions or comments about taxable shipping in Florida? Leave a comment and start the discussion!