Frequently Asked Question: Are shipping charges taxable?
Answer: It depends.
Like almost everything else in sales tax, the laws around taxability of shipping charges you pass along to your customers is not universal. Some states say it’s taxable. Others say it’s not. Imagine how much easier sales tax would be if the states worked together? This post is for online sellers who need some guidance on how each state handles shipping charges. Sort through the list below to find your state as well as other states in which you have sales tax nexus. Here are some important assumptions to keep in mind as you use this list:
- You’re an eCommerce seller, not a traditional brick-and-mortar merchant
- You’re delivering items to your customers via common carrier (USPS, etc)
- You’re not delivering items yourself using your own vehicle. States may have entirely different rules for that scenario.
- You’re shipping taxable items to customers within your state. For example, you live in Georgia and are shipping a taxable item to a customer in Georgia.
- If you have more specific scenarios not covered by these assumptions, you’re best option is to talk to a representative in your state.
States Where Shipping is Taxable
The following states say if you charge for shipping as part of an order then it’s taxable. It doesn’t matter if the shipping charge is part of the price of the item or if it’s listed separately from the price of the item.
- District of Columbia
- Florida (Shipping may not be taxable if it meets certain criteria. See more in Florida Sales Tax for Online Sellers)
- Illinois (See our in-depth look at Shipping in Illinois: Taxable or Not?)
- Missouri (This is slated to change on August 28, 2017 – read more about Missouri’s new sales tax on shipping law here.)
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
States Where Shipping is Not Taxable if Separately Stated
These states say shipping charges are not taxable if you show the charge separately from the selling price of the item. They are taxable if you include the charge as part of the price of the item.
- Maryland (Like Virginia, if shipping and handling are combined shipping is taxable)
- Virginia (NOTE: if shipping and handling charges are combined, then that charge is taxable even if separately stated)
NOTE on Missouri: Starting August 28, shipping (as long as the charges are separately stated from the price of the item) shipping will no longer be taxable in Missouri. You can read about the change to Missouri’s shipping taxability law here.
Want to know more about sales tax? Check out this eCommerce sales tax guide.
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