7 replies to this topic

[Linux4Me]

after following through some of the contributions, ive become aware that some store owners are paying taxes on shipping. Is this true ANYWHERE in the US, or is it other countries ?

[TerryK]

In Canada, if shipping to Canadian destinations, the shipping cost is subject to federal Goods & Services Tax (GST) of 7%. For packages being shipped outside of Canada, I am not charged the GST.

So in my store, I charge GST on both goods and shipping for Canadian customers, but no tax at all to US/International customers.

There's one perspective for you...

Terry

[ArtRat]

taken from the new york state taxation website:

Quote

Question
  Is shipping and handling subject to New York State sales tax?

Answer
  If you charge your customer for shipping or delivery on the sale
of tangible personal property or tangible personal property on which a
taxable service has been performed, the amount on which the sales
tax is to be computed includes your charges for shipping or delivery.
However, if the customer arranges delivery by a third person and pays
this person directly, the third person’s delivery charge is not taxable.
See TSB-M-92(2)S, Delivery Charge Added to Taxable Receipt
Effective September 1, 1991 for more information.

Appliance $499.95
Service contract 30.00
Delivery charge 20.00
Total (before tax) $549.95
Sales tax must be computed on the total receipt of $549.95.

so i hunted down tsb-m-92(2)s and here it is:

Quote

TSB-M-92 (2)S
Sales Tax
January 13, 1992
New York State Department of Taxation and Finance
Taxpayer Services Division
Technical Services Bureau
DELIVERY CHARGE ADDED TO TAXABLE
RECEIPT EFFECTIVE SEPTEMBER 1, 1991
The sales tax law had provided, that when determining the amount of sales tax to collect on a taxable
receipt, charges included on such receipt that represent the seller's cost of transporting the purchase
to the retail purchaser (if such transportation charge was separately stated on the bill rendered to the
purchaser), could be excluded from the taxable receipt.
As a result of an amendment to the sales tax law, effective September 1, 1991, shipping or delivery
charges billed by the vendor (which had been previously excluded from taxation as the cost of
transportation, if separately stated) are part of the taxable receipt subject to sales tax, regardless of
whether such charges are separately stated or whether the shipping or delivery is provided by the
vendor or a third party.
Billings for Taxable Sales
When a customer pays the vendor for a taxable product or service and for its delivery, any charge
for the cost of delivery that the vendor includes on the bill, invoice or other memorandum of sale
given to the customer, becomes part of the receipt subject to sales tax.
Accordingly, when billing for taxable sales that are delivered within New York State (whether such
shipment originates from inside or outside this state) on or after September 1, 1991, sales tax must
be computed on the sum of all the component charges that comprise the taxable receipt including
any charge for transportation, delivery, shipping, postage, freight, handling or similar charges. It is
the vendor's responsibility to collect the tax on such charges regardless of whether the vendor ships
the property by means of its own employees, a contract carrier, common carrier, the mail, or any
other delivery service.
Example (1) A customer purchases a kitchen appliance (including service contract) from a major
department store chain that has its own delivery vehicles. The department store
delivers the appliance to the customer's home and charges $20.00 for its delivery.
Thestore issues the following bill to the customer:
Appliance $499.95
Service contract 30.00
Delivery charge 20.00
Total (before tax) $549.95
Sales tax must be computed on the total receipt of $549.95.

so, you should probably consult your tax accountant or tax lawyer or your local mountaintop mystic guru for advice on what you need to do legally in your state.

[Linux4Me]

yes, im getting myself a good cpa on a short leash before i start taking orders.

[secretuser]

If you do business in the state of Washington, you must collect sales tax on the shipping and handling if the item will be delivered within the state of Washington. The state of washington considers shipping and handling to be a part of the cost of the product and is thus taxable.

[bjhampe]

So how do we charge tax on shipping costs?

[GraphicsGuy]

bjhampe, on Aug 19 2005, 10:05 AM, said:

So how do we charge tax on shipping costs?

<{POST_SNAPBACK}>

Go into each shipping module that you use and assign it the same tax class as your products (assuming that your tax jurisdiction has the same tax rate for shipping charges).

[siano]

GraphicsGuy, on Aug 20 2005, 08:56 AM, said:

Go into each shipping module that you use and assign it the same tax class as your products (assuming that your tax jurisdiction has the same tax rate for shipping charges).

Recently, I've been researching this very issue. My client is telling me to charge WA sales tax on WA sales only when taxable items are in the cart.
It looks to me that the customer may be correct. Has anyone come across a 'fix' or osC code to add this odd tax requirement?

http://apps.leg.wa.gov/wac/default.aspx?cite=458-20-110
( Does retail sales tax apply to all delivery charges by the seller? Delivery charges by the seller making a retail sale are a component of the selling price. If the sale of the tangible personal property or service is exempt from retail sales tax, such as certain "food and food ingredients," retail sales tax does not apply to the selling price, including delivery charges, associated with that sale. Similarly, if the product is sold at wholesale, retail sales tax does not apply to the delivery charges of that sale.