Are The Goods My Business Ships Taxable?

The amount, type and intended use of a product can alter the amount of tax paid when shipping certain items.

Imagine that a grocery store wants to buy three tons of produce from a supplier. Would the freight charges to deliver this produce be taxable? It depends on the particular state’s rule regarding the taxability of certain types of produce. Some states do not tax specific categories of products, such as food. In addition to the category of the product, the intended use of the product affects whether it is taxed.

In some states, a pumpkin is taxable if you intend to use it for decorative purposes, but not if you plan to consume it. Therefore, if the product is considered a taxable good, the freight, shipping or delivery charges are taxable.

Explore our 5 Factors for Freight Taxability e-book to learn more about these shipping regulations!

Five Factors of Freight Taxability

The rules for the taxability of freight or delivery charges vary from state to state. How do retailers figure out when freight and shipping charges are subject to sales and use tax?

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