Sales Tax 101 Shipping States TN

Is Shipping in Tennessee Taxable?

by Mark Faggiano

Shipping Taxability TennesseeLast updated July 14, 2017

The tough thing about sales tax is that every state has it’s own rules and regulations. This means that some states will require online sellers to charge sales tax on shipping charges, while others do not. Every state has it’s own way of doing things, and some are a little more complicated than others. Today we’re taking a look at the taxability of shipping charges in Tennessee.

Sales Tax on Shipping in Tennessee?

Here’s what the 1997 Letter Ruling #97-22 has to say about sales tax on shipping in Tennessee:

Delivery charges taxable Tennessee

In a nutshell, shipping and handling are both taxable in the state of Tennessee as long as the product being delivered is also subject to sales tax.

Also, if a shipment has both taxable and non taxable products, the seller must charge sales tax based on the percentage of goods that are taxable. The seller has discretion to charge sales tax on the taxable item based on either sale price or on weight.

Summary of Sales Tax on Shipping in Tennessee

A seller must almost always charge sales tax on shipping and handling charges for goods sold in Tennessee. For example, if you sell a picture frame for $10, and the shipping and handling charges are $5, then the total taxable amount is $15.

The only exception is if you are shipping a package with a nontaxable item. In that case, shipping and handling are not subject to sales tax.

If a package includes taxable and non taxable items, the seller must charge sales tax based on the percentage of the shipment that includes the taxable item. The seller can choose to measure this percentage either by sale price or by weight of the taxable item.

Do you have questions about sales tax on shipping and handling charges in Tennessee? Start the conversation in the comments!

  • itsacouponlife

    I am in direct sales. The company I am an consultant for charges me TN sales tax up front on the full retail value when I purchase wholesale inventory. They then pay the sales tax for us. Does this make my items non-taxable now and no longer subject to tax on shipping/handling?

  • No matter if sales tax has been paid on an item before, it needs to be paid again at every point of sale. That said, I’m not sure what do you mean that they pay your sales tax for you? If they collect and remit the sales tax, then they must pay that sales tax to the state. Are you saying they also collect and remit sales tax when you make a sale? As you can probably see, this is already getting tricky! I highly recommend consulting with a sales tax expert about your situation. Here’s a list of experts we recommend: http://www.taxjar.com/sales-tax-accountant-directory/

    • itsacouponlife

      Thanks for the site. It is very helpful! Here is some info I found on the special circumstance I am in. http://www.tn.gov/revenue/rulings/sales/11-18.pdf

      I am the “advisor”. As stated on there the “tax payer” already collected the tax on the retail amount. If I charge my customers shipping is it taxable too? Or do my items fall under “non taxable” since they have already had the tax paid? Not sure if that makes since. I am probably going to contact TN Revenue directly 🙂

  • Cleatus

    Is there any limit to Government Greed? Apparently not.

  • The best thing is to apply for your own sales tax number and then your direct sales company won’t have to charge you sales tax on the front end. This is how I handle it with my direct sales business.

    Additionally, as you mentioned, you are paying sales tax on the retail value of the product. Therefore, the wholesale price times the tax rate won’t equal what you are being charged.

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