Five states do not implement any sales tax. Additionally, Hawaii utilizes a general excise tax on business income from retail sales rather than a sales tax to the consumer.
Taxability of Shipping in New York
In the state of New York, if the item being shipped is taxable, and if you charge for the shipping as part of the order, then the shipping charge is considered taxable. If the item is not taxable, then the shipping is not seen as taxable either.
General Considerations
- Some states require sales tax on delivery charges only in special cases.
- Some states don’t require sales tax on shipping charges at all.
- You would charge the destination state’s rate, in addition to any local or county sales taxes for the address to which you’re shipping.
Specifics in California
In California, as long as they are stated separately on the invoice and not more than the actual cost of delivery, shipping charges are not subject to sales tax. Delivery must also be through a common carrier, and handling charges are taxable, so they must be listed separately as well.