- E-commerce growth has increased the complexity of sales and use tax, especially with economic nexus.
- The article explains general and state-specific tax rules for shipping and delivery fees, focusing on Colorado and Minnesota.
- Delivery fees often include handling, postage, freight, and other related charges.
- In most states, delivery fees for taxable goods or services are subject to sales tax.
- If sales are non-taxable, delivery charges are also exempt.
- Bundled transactions with taxable and non-taxable items have specific tax rules based on pricing.
- If sold for a single price, the entire transaction, including delivery, is taxable.
- If listed separately, sales tax is not collected on non-taxable charges.
- Washington uses a percentage model to tax delivery fees for mixed transactions.
- Virginia taxes handling charges but not shipping charges if listed separately.
Source: vatabout.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
