Sales tax is one of the most bewildering subjects for sellers and it becomes more so, because each state has their own set of rules about when it is applied. A common question is whether sales tax is applicable to shipping and handling charges. Louisiana’s Department of Revenue does not make it easy to figure out, so we dug a little deeper to find an answer. Here is what they have to say:
Is Shipping Taxable in Louisiana?
Tl;dr? It appears from the above that you will not pay sales tax on shipping and handling, as long as the charges are separately stated on the invoice. However, if you are a seller ordering an item for a buyer from another seller/manufacturer and the item ships to you first and then you ship it to the customer, the shipping and handling charges that you paid to have the item ship to you are taxable and are passed on to the buyer. See the example in the screenshot for further clarification.
In Summary: You do not have to pay sales tax on shipping and handling charges in Louisiana if you follow these rules.
Louisiana makes it fairly similar for any seller to not pay sales tax on shipping and handling. All the seller needs to do is follow the three rules below:
- List the shipping and handling charges separately from the charges for goods on the invoice.
- Allow the buyer, if he so chooses, to pick up his item from the seller.
- If ordering a product for a buyer from another seller, have that seller ship directly to the customer. This way the buyer won’t have to the pay the sales tax on the shipping and handling to you.
Still need some help? Talk to us in the comments!