Topic Guide
Freight & Delivery Charge Taxability
Whether delivery charges are taxable depends on the state, how the charge is stated, and who controls the shipment. The default rules differ sharply across jurisdictions.
Delivery-charge rules are a recurring audit theme because the default treatment
varies by state and by how the invoice is structured. Pull the controlling
guidance for the state in question before setting your billing policy.
What drives the answer
- Separately stated vs included in the sales price
- Whether the underlying goods are taxable
- Shipment terms (FOB origin vs destination) and who arranges delivery
Frequent errors
- Taxing delivery on exempt sales
- Treating handling and shipping identically when the state distinguishes them
- Ignoring mixed shipments of taxable and exempt goods