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Zhicheng Lai
Zhicheng Lai, Enrolled Agent(EA)
Category: Tax
Satisfied Customers: 811
Experience:  5 years tax preparing experience
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is shipping and handling taxable in texas. If not could ...

Resolved Question:

is shipping and handling taxable in texas. If not could you please tell me where to go so I can have that in black and white
Submitted: 10 years ago.
Category: Tax
Expert:  Zhicheng Lai replied 10 years ago.
Are delivery or shipping charges taxable?
Shipping and handling charges are taxable if the charges are associated with the sale of taxable goods or service.

For example, you sell a sofa to a customer for $500. You agree to deliver the sofa and charge separate fee of $50 for delivery. Because your sale of the sofa is taxable, your $50 delivery charge is also taxable. You should collect sales tax on $550.

In contrast, if you sold a similar sofa for $500 to another customer who issues you a properly completed resale or exemption certificate, then your sale and the delivery charge are exempt. If you deliver the sofa for a fee of $50, the delivery charge is not taxable. You do not collect sales tax on the $550.

Note: "Delivery," "shipping," or "postage" on an invoice represents delivery charges. Please refer to Rule 3.303. Please note that separately stated charges for postage are not taxable when billed by the seller to a client if the cost of the postage was incurred by the seller at the request of the client to distribute tangible personal property to third party recipients designated by the seller's client.

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