Tip #281 – Are Delivery Charges Taxable?


Tip #281
Are Delivery Charges Taxable?

I get asked this question all the time and the answer is…
It depends on your state.

As far as I can tell, delivery charges are taxable in all states except:

  • Alabama
  • Arizona
  • California
  • Idaho
  • Iowa
  • Louisiana
  • Maine
  • Maryland *
  • Massachusetts
  • Nevada
  • Oklahoma
  • Utah
  • Virginia * and
  • Wyoming

 

* In Maryland and Virginia if shipping (delivery) and handling are combined then the charge is taxable.

Also, as far as I know, a relay/cable or service charge is always taxable.

flowerSoft allows you to indicate separately whether or not your delivery and service charges are taxable.

As always, check with your accountant before you make any changes in flowerSoft.

 

3 thoughts on “Tip #281 – Are Delivery Charges Taxable?

    1. Here is something else I found just now…
      “The best evidence that transportation or delivery charges were agreed to separately and apart
      from the selling price is a separate and distinct contract for transportation or delivery. However,
      documentation which demonstrates that the purchaser had the option of taking delivery of the
      property, at the seller’s location, for the agreed purchase price, or having delivery made by the seller
      for the agreed purchase price, plus an ascertained or ascertainable delivery charge, will suffice. As
      stated in Section 130.415 of the Department’s regulations, if the charges for transportation or delivery
      exceed the cost of delivery or transportation, the excess amount is subject to tax.

      Please note, however, in light of the recent Supreme Court of Illinois case of Kean v. Wal-Mart
      Stores, Inc., 235 Ill.2d 351, 919 N.E.2d 926 (2009) concerning the taxation of delivery charges, the
      Department is considering amending Section 130.415.

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  1. Hate to disagree with you John and I assume you have checked with your accountant, but after looking into this the Illinois Supreme Court seems to have ruled in favor of Walmart when it charged sales tax on the delivery of some item to a customer.
    Go to the internet and Google “Are delivery charges taxable in Illinois?”, there are plenty of links on the subject.
    I would play it safe and start charging sales tax instead of having to pay them if and when you get audited.

    Like

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