Key takeaways
- Shipping tax rules vary by state: Some states tax shipping charges if the associated items are taxable, while others exempt them, especially if fees are listed separately on the invoice.
- Invoice presentation matters: Separating shipping charges from product prices can influence whether they're taxed in many states.
- Mixed orders can complicate taxability: When shipments include both taxable and non-taxable items, some states may tax the entire shipping charge or apply tax proportionally.
In short: Whether shipping is taxable in the U.S. depends on the state. Some states tax shipping charges when the goods sold are taxable. Others exempt shipping if it is listed separately on the invoice. States with no state-level sales tax generally do not tax shipping at all.
Shipping costs are a key but often confusing part of sales tax in the United States. A common question for businesses is whether shipping is taxable. The short answer? It depends on the state. Related reading: Sales Tax for Subscription-Based Businesses: What Are the Rules?.
If you ship physical goods, especially as an e-commerce seller, you need to know whether to charge sales tax on shipping. This guide shows how each U.S. state handles shipping tax. It helps you see when shipping costs become part of a taxable sale.
How does sales tax apply to shipping charges?
Sales tax on shipping charges depends on a few factors set by each state. Shipping charges are the fees you charge to deliver goods to customers. Whether they are taxed often depends on:
- Taxability of the item sold: If the item is taxable, the shipping may also be taxable.
- Method of delivery: Using a common carrier or delivering it yourself can change the tax.
- Presentation on the invoice: Listing shipping fees separately on the sales invoice can affect whether they're taxed.
In which states is shipping generally taxable?
The states below usually require sales tax on shipping, especially when the items sold are taxable. Take care when you charge customers in these states.
Arkansas
Sales tax applies to delivery charges if the shipped items are taxable. The delivery is still taxable if the shipment holds both taxable and non-taxable items.
Connecticut
Shipping charges are taxable when tied to the sale of taxable goods. If the item is tax-exempt, shipping is not taxed either.
District of Columbia
If the items are taxable, the shipping charges are taxable too. This applies whether or not they're listed separately.
Georgia
Shipping is taxable when the sale is taxable. If the seller or a private carrier makes the delivery, the charges are almost always taxable.
Hawaii
Hawaii has a General Excise Tax (GET), not a traditional sales tax. Delivery charges count as part of gross receipts and are generally taxable.
Indiana
Shipping is taxable when it's part of a taxable retail sale, even if listed separately on the invoice.
Kansas
Shipping and delivery charges are taxable when tied to the sale of taxable goods. This includes charges for shipping, freight, and delivery.
Kentucky
Delivery charges are subject to sales tax when they're part of a taxable sale, even if they're billed separately.
Minnesota
Shipping is taxable if it's part of a taxable retail sale. Even separate delivery charges are taxable, unless the delivery happens after the sale is complete.
Mississippi
Shipping charges are taxable when part of the sale of taxable goods. But if the customer arranges shipping separately, it may be exempt.
Nebraska
Sales tax applies to shipping when the charges are tied to the sale of taxable items, even if listed separately.
New Jersey
Delivery charges for taxable items are subject to tax. For mixed orders (taxable and non-taxable items), you should split the delivery charge by sales price or weight. If you don't split it, the entire shipping charge is taxed.
New Mexico
New Mexico uses a gross receipts tax (GRT). Delivery charges are usually taxable when tied to a sale.
New York
If the items sold are taxable, any delivery charges are taxable too. This includes shipping and handling, even when listed separately.
North Carolina
Shipping and handling are taxable when part of a sale of taxable goods. You can leave these charges out of the taxable amount only under strict conditions.
North Dakota
Shipping is taxable when tied to a taxable item, unless the buyer arranges it under a separate contract.
Ohio
Delivery charges are taxable when part of a sale of taxable property, even if listed as a separate item.
Pennsylvania
Delivery is taxable if the product being delivered is taxable. If an invoice has both taxable and non-taxable items, shipping may still be taxed.
Rhode Island
If the shipped items are taxable, shipping and handling are taxable too. How they appear on the invoice makes no difference.
South Carolina
Shipping charges are subject to sales tax when they're part of a taxable sale.
South Dakota
Delivery charges for taxable items are taxable. If a shipment has both taxable and exempt items, shipping is taxed in proportion.
Tennessee
Shipping charges are taxable if they're part of the taxable sale. If the customer picks up the product, no shipping tax applies.
Texas
Shipping and delivery charges are taxable when the items sold are taxable, even if listed separately. Handling charges are always taxable.
Vermont
Delivery charges for taxable sales are also subject to tax. Charges tied to exempt sales are not taxed. We cover this in more detail in Sales Tax on Food: A State-by-State Guide.
Washington
Shipping and delivery charges are taxable if they're part of the sale. Handling charges are always taxable.
West Virginia
Shipping is taxed if it's part of the sale of tangible goods. Shipping that happens after the sale, or at the customer’s direction, may be exempt.
Wisconsin
If the items being shipped are taxable, the delivery charges are generally taxable too, even if listed separately.
In which states is shipping generally not taxable?
The states below usually do not require sales tax on shipping charges if certain conditions are met. A common condition is listing the charges apart from the product price:
- Alabama
- Arizona
- California
- Colorado
- Florida
- Idaho
- Illinois
- Iowa
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Missouri
- Nevada
- Oklahoma
- Utah
- Virginia
- Wyoming
Important Note: These states often require you to list shipping charges separately on the invoice. If you bundle shipping and handling charges, the entire amount could be taxed.
Which states have no sales tax on shipping?
States with no sales tax generally do not tax shipping charges. These states do not impose state-level sales tax:
- Alaska (local taxes may apply)
- Delaware
- Montana
- New Hampshire
- Oregon
So, is shipping taxable?
Shipping is taxable in some U.S. states and not in others. Each state takes its own approach to sales tax on shipping. If you don't follow its rules, you can face compliance issues. As we've seen, the answer to ‘is shipping taxable?’ depends on several factors.
Not sure whether to include shipping costs in a taxable sale? Check with each state’s tax authority, or use a tax automation tool to stay compliant. Knowing how tax and shipping work together is key to e-commerce success.
Looking for the best automated tax compliance solution for your business?
Taxually is an all-in-one VAT and sales tax automation platform designed to simplify compliance, reduce risk, and scale with your business. From registration to filing, our software automates every step—across the U.S., EU, and beyond.
Book a free call with our tax experts to see how Taxually can streamline your tax operations and help you stay fully compliant in every market.
How Taxually handles this
Taxually’s LumaTax runs a nexus analysis on your sales, helps you register in the states where you must collect, and prepares and files multi-state sales tax returns, including Canadian GST/HST. LumaTax is currently available to enterprises and accounting firms. For the full workflow, read how to automate US sales tax filing in every state.
Related guides
Frequently asked questions
Is shipping always taxable in the U.S.?
No. Whether shipping is taxable depends on the state and how the charges are presented on the invoice. Some states tax shipping when it's tied to the sale of taxable goods, while others exempt it if listed separately.
What if my order includes both taxable and non-taxable items?
In mixed orders, some states may tax the full shipping charge, while others allow for a proportional tax based on the taxable portion of the order.
Does it matter how I list shipping on the invoice?
Yes. Separately stating shipping charges from product prices can make a difference. Many states only exempt shipping if it's itemized distinctly.
Are handling charges treated the same as shipping?
Often not. Some states always tax handling fees, even if shipping is exempt. Combining shipping and handling into one line item can make the full amount taxable.
What about states without sales tax?
States like Oregon, Delaware, and Montana don’t impose state-level sales tax, so shipping charges are generally not taxed there, though local rules may still apply.
