Last updated July 14, 2017
So you have sales tax nexus in Arkansas and you’ve made a sales to a customer there. Should you charge sales tax on the shipping charges you charge to your customer? Let’s take a look.
Is shipping taxable in Arkansas?
Here’s what the Arkansas Department of Finance and Administration has to say about sales tax on shipping charges:
To sum it up, shipping charges are considered to be part of the gross receipts from the sale and therefore taxable in the state of Arkansas. The only exception is if the item being shipped is non-taxable or when the buyer is billed separately by a 3rd party carrier. Most of the time, as an eCommerce seller, you are shipping the items yourself so you would charge sales tax on shipping charges when shipping taxable items.
On the other hand, if you are shipping a non-taxable item then don’t charge sales tax on the delivery charges. If you are shipping a mix of taxable and non-taxable items then charge sales tax based on either the percentage purchase price or percentage weight of the taxable vs. non-taxable items.
If you have sales tax nexus in Arkansas, the amount you charge your customer for shipping is almost always going to be taxable.
The only exemptions are when a 3rd party carrier bills your customer for the shipping or when you are shipping non-taxable items.
Have questions about sales tax in Arkansas? Check out our Arkansas Sales Tax Guide for Businesses or start the conversation in the comments.