Is Shipping Taxable? A State-by-State Guide for U.S. Sellers
Shipping costs are a crucial—but often confusing—part of the sales tax landscape in the United States. One of the most common questions businesses have is whether shipping is taxable. The short answer? It depends on the state.
If you're shipping physical goods, especially as an e-commerce seller, understanding whether to charge sales tax on shipping charges is key to staying compliant. This guide outlines how each U.S. state handles shipping tax, helping you determine when shipping costs become part of a taxable sale.
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.
Understanding shipping charges and sales tax
Regarding sales tax, shipping charges refer to the fees associated with delivering goods to customers. The taxability of these charges often depends on several factors, including:
- Taxability of the item sold: If the item is taxable, the shipping may also be taxable.
- Method of delivery: Using a common carrier versus personal delivery can influence taxability.
- Presentation on the invoice: Separately stating shipping fees on the sales invoice can affect whether they're taxed.
States where shipping charges are generally taxable
The following states usually require sales tax on shipping, particularly when the items sold are taxable. Sellers must be cautious when charging customers in these jurisdictions.
Arkansas
Sales tax applies to delivery charges if the shipped items are taxable. The delivery is still taxable if both taxable and non-taxable items are in the shipment.
Connecticut
Shipping charges are taxable when related to the sale of taxable goods. If the item is tax-exempt, shipping is also not taxed.
District of Columbia
If the items are taxable, the associated shipping charges are taxable too, regardless of whether they're separately stated.
Georgia
Shipping is taxable when the sale is taxable. If delivery is done by the seller or a private carrier, the charges are almost always taxable.
Hawaii
Hawaii has a General Excise Tax (GET), not a traditional sales tax. Delivery charges are included in the gross receipts and are generally taxable.
Indiana
Shipping is taxable when part of a taxable retail sale, even if listed separately on the invoice.
Kansas
Shipping and delivery charges are taxable when associated with the sale of taxable goods. This includes charges for shipping, freight, and delivery.
Kentucky
Delivery charges are subject to sales tax when made as part of a taxable transaction, even if they're billed separately.
Minnesota
Shipping is taxable if it's part of a taxable retail sale. Even separate delivery charges are considered taxable unless they occur after the sale is completed.
Mississippi
Shipping charges are taxable when part of the sale of taxable goods. However, if shipping is arranged by the customer separately, it may be exempt.
Nebraska
Sales tax applies to shipping when the charges are connected to the sale of taxable items, even if separately listed.
New Jersey
Delivery charges for taxable items are subject to tax. Mixed orders (taxable and non-taxable items) usually result in the entire shipping charge being taxed.
New Mexico
New Mexico uses a gross receipts tax (GRT), and delivery charges are typically taxable when associated with a sale.
New York
If the items sold are taxable, any delivery charges, including shipping and handling, are also taxable—even when separately stated.
North Carolina
Shipping and handling are taxable when part of a sale involving taxable goods. Charges must be excluded from the taxable base only under strict conditions.
North Dakota
Shipping is taxable when associated with a taxable item and is not separately contracted by the buyer.
Ohio
Delivery charges are taxable when part of a transaction for taxable property, even if separately itemized.
Pennsylvania
Delivery is taxable if the product being delivered is taxable. If an invoice includes both taxable and non-taxable items, shipping may still be taxed.
Rhode Island
If the shipped items are taxable, shipping and handling are taxable as well, regardless of how they are presented on the invoice.
South Carolina
Shipping charges are subject to sales tax when included as part of a taxable transaction.
South Dakota
Delivery charges for taxable items are taxable. If a shipment includes both taxable and exempt items, shipping is taxed proportionally.
Tennessee
Shipping charges are taxable if they are part of the taxable sale. If the customer picks up the product, no shipping tax applies.
Texas
Shipping is taxable unless it is separately stated and involves only the actual cost of delivery. Handling charges are always taxable.
Vermont
Delivery charges for taxable sales are also subject to tax. Charges related to exempt sales are not taxed.
Washington
Shipping and delivery charges are taxable if they are part of the sale. Handling charges are always taxable.
West Virginia
Shipping is taxed if it is part of the sale of tangible goods. Shipping that occurs after the sale or at the customer’s direction may be exempt.
Wisconsin
If the items being shipped are taxable, then the delivery charges are generally taxable too, even if separately stated.
States where shipping charges are generally not taxable
These states usually do not require sales tax on shipping charges, as long as certain conditions are met (like separating the charges 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 that shipping charges be separately stated on the invoice. Any bundling of shipping and handling charges could result in the entire amount being taxed.
States without sales tax
These states do not impose state-level sales tax, meaning shipping charges are generally not subject to tax:
- Alaska (local taxes may apply)
- Delaware
- Montana
- New Hampshire
- Oregon
Conclusion
Across the U.S., states take different approaches to sales tax on shipping, and failing to follow their rules can lead to compliance issues. The answer to the question ‘is shipping taxable?’ is, as we’ve seen, dependent on a number of factors.
If you're unsure whether to include shipping costs as part of a taxable sale, consult each state’s tax authority or use a tax automation tool to stay compliant. Understanding how tax and shipping work together is essential for e-commerce success.
Do you need help with your sales tax compliance? Book a free call with one of our sales tax experts to find bespoke solutions for your business, optimize your tax costs, and reach millions of new potential customers.
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.
