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Sales Tax on Shipping?

NOA Shipping TaxMy order for the Wii component cables, after brief five-hour stint as "backordered," has shown "Preparing Order" since about 5pm ET yesterdy.

One peculiarity, though, is the sales tax I'm being charged. The product is $29.95, but as you can see, I'm being charged sales tax on the shipping charges as well (PA sales tax is 6%).

So far as I know, I've never been charged sales tax for shipping. Can it be taxed? Is it normally included in the shipping price by the shipper?

94 Responses to "Sales Tax on Shipping?"

  1. From the Pennsylvania Department of Revenue:

    If the item(s) being shipped is taxable, the shipping and handling charges are also subject to tax. If the item(s) being shipped is not subject to Sales Tax, neither are the shipping and handling charges. In the case where items being shipped are of a mixed (both taxable and nontaxable) nature, then the shipping and handling charges for the entire shipment are subject to tax.

    1. Ed - i have a question for you.

      If you buy something online and return it to the store, shouldn't you receive all of your tax money back? For example, I live in Florida. Our tax rate is 7%. If I buy something for $1 and there is $1 shipping, I am charged $2.14 for the item and shipping. If I return the item to the store, I am only receiving $1.07 back, not $1.14.

      The clause on the back of the online receipt reads
      "RETURN AN ITEM TO A STORE"
      Take the item with all original packaging and accessories plus the packing slip to Customer Service at your local store. As associate will issue a refund to the original credit card or provide a store credit for the cost of the item and the sales tax, if applicable. You will receive immediate credit for your return."

      Please let me know at your earliest convenience. Thank you!

    2. @Cathy: I know you specifically asked Ed for input, but I thought I'd beat him to the upper-cut. :smile:

      If you return an item and the retailer / seller does not refund your shipping, they cannot refund the tax you paid on shipping. So, in your example, you should get back $1.07 because the retailer retained your $1 for shipping and $0.07 for shipping tax.

      Cheers!

    3. Thanks Dilan - that was helpful. Learn something new every day :)

    4. Hi Ed:
      Hoping you can help me. I ordered two shirts from Tommy.com and was charged tax. I emailed the store--online and explained that I should not pay tax for clothing since I live in PA. I received this reply. now, I order a lot of clothes online from all the stores you can think of and have never been charged tax for "shipping". this email indicates that shipping is a service and services are taxable.

      I don't care if the tax charge was 5 cents. it is the principal and I believe it is incorrect. Please advise! This seems like a low and dirty way for companies to get some $$$ since they can't legally charge tax for clothes.

      All services are taxed. Shipping being a service is taxed. Please contact your local government for more information on federal and state taxes. The quote below is directly from the IRS.

      "Sales tax is a consumption tax placed on taxable goods and services. As of July 2010, 45 states impose sales taxes plus 7500 cities, counties and other jurisdictions. However, not all states charge sales tax on services, and some make specific exemptions for certain services. For example, the state of Washington exempts repairs on manufacturing equipment from sales tax."

      This is the reply I received.

  2. Well, that answers that. Thanks. Other shippers must include the S&H tax in the shipping price they quote.

    Thanks.

  3. Isn't it wonderful living in a big blue state like Fast Eddie Rendell's Pennsylvania. It's hard to find sympathy for people who live in this type of state. The voters continually vote for the tax loving democrats. Live it...Love it...spend it.

    1. And I will continue to vote democrat. I think you need to do your homework. :twisted:

    2. This comment goes to show how shallow your knowledge is! Governor Rendell did not originate the 6% tax! It's been around since long before he took office. He has kept it down at 6%.(Pittsburgh/Allegheny County has a 7% tax, but that extra 1% goes directly to Pittsburgh area and nowhere else.) Considering all the cries for money from the different agencies in this state, I think Mr. Rendell is doing a terrific job. Neither you nor I could do better, so cool your jets, kid, until you are in a position to "put your money where your mouth is"! And no, I don't like paying tax on shipping, either, but at least now I know why, and that it's not just a mail order company trying to pull a fast one.

    3. i'd rather pay taxes than give power to the republicans. i think we've seen what they can do (or should i say, can't do). one of those things being the inability to keep partisan talk out of an answer to a simple question about sales tax.

    4. Bravo !!! There's only one place WORSE "New York"

    5. Hi Kodera, try this on for size, if it wasn't for the Democrats voting for tax, the Republicans wouldn't have anything to spend. Remember, the Republicans are the ones that have always driven this country to it's knees economically. ; )

    6. That's the problem. Democrats would rather pay taxes than vote Republicam. One thing is, most Democrats are exempt from paying taxes, thanks to Bush's 2001 OBRA, so that's easy for them to say. Second thing; most Democrats are sitting home, being subsidized by the taxes that everyone else has to work to pay. Reality is, the do nothing Dems get their benefits only after the Dem politicians pay their union buddies, corporate sponsers and line their own pockets first. Elitism at it's best, that's what Dem Politicians think 'Trickle Down Economy' means - You get what trickles down after it's been skimmed, sifted and laundered through them first. Imagine four trillion of the reserve, tax income, and lending in two years (that's a lot of zeros and it's like one hindred thousand dollars every second or two). But you aren't getting it. Otherwise every man, woman and child in the US would recieve over one hundred thousand each. It's going to Dems bogus green CCX investments (even to this day), payroll for only union member govt jobs, purchasing GM, etc. etc. And they want you to think that the next round of taxes that you all support is going to go for something good for you. I'd rather buy the Brooklyn Bridge! I say, if you don't pay taxes and you're not on SSI due to age or a true disabiliy, you shouldn't be allowed to vote!

  4. Kodera said on November 16, 2006:

    Isn't it wonderful living in a big blue state like Fast Eddie Rendell's Pennsylvania. It's hard to find sympathy for people who live in this type of state. The voters continually vote for the tax loving democrats. Live it...Love it...spend it.

    That strikes me as an ignorant comment. PA sales tax is 6% - several other states have more. Furthermore, necessity items like food, (most) clothing, and medication aren't taxed.

    And, as anyone who's read this blog for awhile, it's safe to say I didn't vote for Rendell. Your comment is out of place.

    1. Oh my Gosh.... be happy you are only paying 6% or 7% sales tax. Where I live... I pay 8.75% sales tax on Groceries, and 9.75% on everything else, so what are you complaining about?!?!

  5. Sales tax isn't 6% in the whole state of PA. I live in Allegheny County and the sales tax is 7% unfortunately.

  6. d0le said on November 16, 2006:

    Sales tax isn't 6% in the whole state of PA. I live in Allegheny County and the sales tax is 7% unfortunately.

    Yes, Allegheny and Philadelphia county have 7% sales tax. But the state sales tax is 6%.

    1. Philadelphia also has its own city income tax as well.I have not lived there for many years and I assume that it has risen quite a bit since I moved.
      Tax and spend. Why doesn't the government follow a budget? Oh yeah, the democrats have refused to offer a budget so they can redistribute wealth to buy votes.

  7. I live in the great state of New York (Western), the tax here varies by county and is as high as 8.25% around Buffalo. Also if you purchase something on line NYS requires shippers in all 50 states to charge and remit the tax. - now thats a hit in the head.

  8. Kodera said on November 16, 2006:

    Isn't it wonderful living in a big blue state like Fast Eddie Rendell's Pennsylvania. It's hard to find sympathy for people who live in this type of state. The voters continually vote for the tax loving democrats. Live it...Love it...spend it.

    I guess I shouldn't feed the trolls, but this is absolutely ridiculous. A quick survey of a couple "red" states would show your ignorance. Arkansas has a 6% state sales tax, Indiana 6%, Texas 6.25% and Idaho 5%. Tennessee taxes food at 6% and everything else at 7%. At least get your facts straight next time.

    Also, I would hardly call Pennsylvania a "big blue state." Kerry won it by under 200k votes in 2004. There's a lot of space between Pittsburgh and Philadelphia, and political leanings are much different in that part of the state.

    All state sales tax rates here.

  9. Red, Blue they are sc---wng you! While you argue back and forth, have to pay the bill. Turn your anger towards the politicians. Tell them that they collect enough LOTTO and sales and land tax and KNOCK IT OFF. I THINK TAX ON SHIPPING FROM THE INTERNET IS DOWN RIGHT DIRTY and they did not start off low either. EVER LOOK AT THE TAX ON YOUR HOME AND CELL BILL. WHAT'S "OTHER TAX" ? Don't BLOG EACH OTHER. WRITE THEM AND TELL THEM WHAT YOU THINK.

  10. PA has had a 6% sales tax long before Rendell...and it's been charging sales tax on S&H for a long time as well.

  11. 16 years as state and local tax.
    if the answer to a sales tax questions does not start with "It depends", then the answer is suspect (not wrong just suspect).
    Here, it depends on the state and whether the transaction itself is subject to tax (mentioned already), not exempt like resale, federal sale, interstates, etc.
    Some states charges tax on services, like WI and TN. shipping as a service will be subject to tax. Some states, like CA does not tax shipping but only if pursuant to contract, separately charged, at cost and delivered other than own facility.
    Yes, rates varies from state-to-state, because tax has four components, state, county, city and district. Some states has only one tax rate statewide like NJ and VA, while others like CA and AZ has various rates by city.
    Local Rule - there are also states that does not administer local taxes, so you will need to deal with locals separately.
    hope this was helpful.
    thanks - Ferdi 562-260-0907

  12. You guys are missing the point. If bought in the store, you're only subject to paying tax on the price of the item. You're being penalized because you ship it. If it's right to pay tax on shipping, then I should get taxed when I ship something. Since I don't, I shouldn't have to pay the tax when a business ships it. It's also irrelevant what other states charge, we're all getting screwed any chance they get.

  13. I think paying tax on shipping charges is outrageous also.
    How many companies report that tax when they do their sales tax?I wonder.
    There is nothing on the tax form to indicate the amount .

    I do not charge shipping on my site and very few sales come from PA anyway.

  14. What States require shipping charges to be taxed?

  15. I agree with HD, the additional tax on shipping is outrageous.
    I shop a lot through QVC and I think Home shopping is a great convience for the working person as well as the sick and the elderly. But what a slap in the face to tax these people on the ease of shopping on TV. I certainly am going to stop buying from QVC and certainly spread the word of this "scam". With all the money PA is bringing in sellling lottery tickets I think this additional tax is appauling. I especially feel bad for the sick and ederly that depend and apprecitate Home shopping. Home shopping gives these people a sense of independence being able to buy presents for their family on their own, now to find out they are paying extra tax on the shipping. SHAME! SHAME on PA and any other state that does this.

  16. Most states do this. The key is that you're being charged shipping & HANDLING.

    They're basically taxing the handling. Otherwise, people would charge $1 for the item and $50 for the handling, thus avoiding taxes.

    Companies report all income. But the their shipping charges count as an expense, so that washes out.

    And if you don't like paying taxes, try building your own highway some time...

  17. Actually, it's not true that "most" states charge tax on shipping. I order online and through mail order fairly often and I had never heard of this until today (which is how I ended up on this site 'cause I wanted to see if anyone else out there had a problem with this concept). Out of curiosity, I went to an online shopping site (I think it was Amazon) and discovered that exactly half of the states charge tax on shipping. My embarrassingly blue state of MA does not, which, to those who have alluded to their being a political connection here, might think is odd --- but it does explain why I never heard of it. :???:

  18. Okay let's clear up a few things here. i am an administrator for a major electronic/sound company and handle tax issues like this all the time. First of all when you order through the mail or on TV you will or will not be charged Sales and Use Tax depending on the Nexus Ruling. This means that if the particular vendor you are ordering from has a significant presence in the state that the merchanise is being shipped then they are required (by law) to collect and remit the sales tax to that particular state. A significant presence means if they have a store, warehouse, manufaturing plant or any other type of presence in the "ship to" which also includes shipping large volumes to a particular state. Years ago I used to be a home party planner and we ALWAYS charged tax on shipping and handling. I can also tell you (having lived in MA most of my life) that you will be charged tax on shipping (which is a service) if you are being taxed on the merchandise itself. I would bet that most of you pay sales tax on meals you eat at restaurants or hotels that you stay in right? You pay tax (assuming you don't live in a state without state sales tax) on services performed on your car right? Then why would you think that being charged tax on shipping would be any different? It is a service that is being provided. We don't have to like it but that is the way that it is. If you don't want to pay sales tax on shipping with mail, phone, or web orders then find a company that does not have a significant presence in the state you are shipping to and buy from them. Our company has a presence in every state. We collect and remit sales tax to each state including the tax that we must charge on shipping. It is considered part of the selling price. Deal with it or not!

  19. geez, linda. why so hostile? we're just having a discussion.

  20. CL I'm not hostile at all........I think that is just how you took it...that is the problem with messaging on here or emailing for that matter....people put their own inflection on what is being said. I was merely informing, giving examples and giving other options as to how people can avoid paying sales the tax on shipping. So lighten up will you....sheesh.......lol

  21. I disagree with Linda. CL has it right. Not ALL states charge tax on shipping and handling. Obviously, Linda, your state requires it,but California, for one, does not. Yes, California taxes on the items but not on the shipping, which is expensive enough without taxing it.

    1. I'm from california and i came to this site today because i looked at a bill and noticed that im being charged sales tax for shipping and handling and both the company and I are located in southern california. California as a state may not "tax...on the items but not on the shipping" but this company in Long Beach CA is certainly taxing the shipping/handling fees. what to do

  22. This is a very interesting discussion: I came across this board after signing up to be a consultant in the state of Virginia for one of those pyramid-schemes, otherwise known as "Direct-Sales" or "Multi-Level Marketing". One of the things that floored me was that they taxed the S&H. I do a LOT of mail-order and never came across this before in my life. I didn't think it was legal and thought it was just another way for this pyramid company to make $$. They already charge a lot of S&H (12% for orders over $100) and the S&H was all taxable. When I questioned it, the company responded that they have always done it that way, "direct sales" is different from mail-order, and said the "tax assessors tell us which states need to have their S&H taxed".. I still didn't buy their explanations.

    Linda's explanation helped a little bit. I see that this is not an isolated thing.

  23. EAJ, I also discovered the tax on shipping as a result of becoming an MLM consultant. Was doing Arbonne skin care briefly. Found that their shipping charges were quite high, on top of the fact that they made you tax the shipping, even though in MA it's not required from what I can tell. (On a side note, I've now switched to ONE Group, an Australian company, which curiously enough not only has more natural products than Arbonne, but because they are in a foreign country, there is no tax at all --- and no shipping if >$100. Much better products and much better deal, far as I'm concerned!) See my website if you're interested. I'm just curious what MLM company you were/are with.

  24. CL,
    My MLM company is Southern Living At Home. They charge at least 12% for S&H, and tax it all.

  25. Arizona is a state that does not tax shipping and handling. Although recently when placing inventory orders for my Slumber Parties business, they had accidently started charging AZ residents tax on shipping so they had to research and correct that wrinkle.

    I personally think it is absolutely insane to pay taxes on shipping. Just my opinion of course.

  26. :cool: This is an awesome discussion! I did a search on google and found that Sharper Image has an easy to understand explaination about this on their site.

    Here is what it says:

    Tax Information for U.S. Destinations

    The Sharper Image is required to charge sales tax in states where we have retail stores or other operations. Sales tax is applied to the total amount of the order in accordance with local tax laws. In some states the taxable total may include charges for shipping/handling and gift wrap (if applicable) these states are indicated with an asterisk.

    The Sharper Image charges sales tax:
    AL, AR*, AZ, CA, CO*, CT*, DC, FL*, GA*, HI*, IA, IL, IN*, KS*, KY*, LA, MA, MD*, MI*, MN, MO, NC*, NE*, NJ, NM*,NV*, NY*, OH*, OK*, PA*, RI, SC*, TN*, TX*, UT*, VA, WA*, WI*

    Sales tax is calculated at the time of checkout based upon the shipping destination of your order. If your order has more than one shipping address, sales tax will be applied to the individual items in your order based upon the specific ship-to destinations.

    No sales tax is charged on the purchase of Gift Certificates or Gift Cards. However, purchases paid for with Gift Certificates, Gift Cards, or other online currencies will be charged sales tax in accordance with the applicable laws.

    1. This information is outdated and is not helping me in my search for an answer here. I just realized that I was charged tax on shipping. I have never paid for tax on shipping in my life when ordering online. Why am I being charged now when I haven't been charged by other places? I live in NC.

  27. Jason Bessey said on November 16, 2006:

    Kodera said on November 16, 2006:

    Isn't it wonderful living in a big blue state like Fast Eddie Rendell's Pennsylvania. It's hard to find sympathy for people who live in this type of state. The voters continually vote for the tax loving democrats. Live it...Love it...spend it.

    I guess I shouldn't feed the trolls, but this is absolutely ridiculous. A quick survey of a couple "red" states would show your ignorance. Arkansas has a 6% state sales tax, Indiana 6%, Texas 6.25% and Idaho 5%. Tennessee taxes food at 6% and everything else at 7%. At least get your facts straight next time.

    Also, I would hardly call Pennsylvania a "big blue state." Kerry won it by under 200k votes in 2004. There's a lot of space between Pittsburgh and Philadelphia, and political leanings are much different in that part of the state.

    All state sales tax rates here.

    Sorry but the sales tax chart is wrong on WA state at least. We are paying 8.03% sales tax here. BUT we don't have income tax. Any of you check out the Fair Tax yet? opinions?

  28. I hope all here understand the string of concern is about sales tax on SHIPPING. I'd think most of us here in the USA already know that tax is applied to the items depending on the so called has a business "presence in the state" of destination.

    The big problem here is sales taxing shipping fee's. Some here have said "handling" is a service therefore it is taxed. Interestingly, most of the etailers are combining the shipping and the handling as "shipping/handling" thus they feel the biased opinion to tax the shipping part.

    As an avid shopping on line and in the past, mail order catalogs, I have lots of experience and have found that just about all of the purchases performed by mail DO NOT tax shipping no matter what state it comes from. I live in CA so this would be my only experience of the above however, since the posts here mention it depends on the different states and the rules per state, I cannot understand why one etailer believes that shipping to CA is required and another etailer says it is not. Almost all deliveries to CA are never taxed on the shipping but since some combine "shipping/handling" in their description it would appear a political way to gouge a consumer for another 6% to 9% weather they pay it to the state government's (thiefs) or not.

    Years ago, Dell Computer did not tax any purchase let alone shipping/handling. The governments got upset that they were not getting additional tax revenue from a new company in Texas thus, felt they were missing out due to the law at the time. What did they do with Dell? They put the pressure on Mr Dell what ever that meant and now we all pay sales tax on purchases except for some items however there is no tax applied to shipping...in fact, most of the time Dell waives shipping charges to sell products.

    Qestion still remains, what are merchants required to tax and the last people to ask this question to would likely be the merchant who stands to receive our money with an alleged promise the taxes on shipping is sent to the government.

    Anyone care to add sales tax on shipping only comments?

  29. I'm so glad I found this site. I have never in my life heard of a company taxing SHIPPING until I ordered from QVC for the first time today. Paying 9.25% tax on the product was bad enough so I sent them a complaint. I really though taxing shipping had to be illegal but they sent me back a rather rude email saying they don't benefit from the extra money. So, where does it go? If it truly is required by the state then why are we not charged tax on shipping at the post office?

  30. I am a web developer for a online retail store in NJ and was recently informed ( today ) that i have to recode our online shopping cart to tax the shipping charges. I guess you can add one more state to the list. I was a little shocked when my manager told me this and decided to do a little reseach and found out that apparently since Oct 1 2006 the NJ Use tax ( the tax were all supposed to pay come tax time that we arent charged for all the orders online or from a magazine ) is supposed to be paid for the items and the shipping. I'm figuring that since the consumer is coming up with the tax we ( the supplier ) are now responsible for it.

  31. I agree with most people when i say that paying tax on shipping and handling really sucks... I mean, tax should only apply on the product itself, and your paying shipping and handling to get it delivered to you, meaning shipping/handling costs are not really part of the price of the product...

    I actually found this site when i wasa trying to figure out if taxes were applicable on shipping and handling (although i was really looking for a site regarding canadian taxes...)

    And while your all complaining about a 5%, 6% or even 8% tax (and I mean no offence to anyone here), I'm sitting here and cursing the sales taxes that i have to pay here in Quebec (13%)...

  32. Wow, im shocked. I just happen to search this topic and there was a clear answer!

    I bought something on eBay for $2.99 with shipping of $6.99 and just happen to pay attention to the 60 cents they were charging me for tax! For something thats only $2.99, 60 cents is a 20% tax. When I questioned the seller, they sent me these long drawn out bla bla bla letters about how they go about figuring tax. Good or bad economy, im not going to over pay even 42 cents! I am glad I found this page, and reluctantly paid the full freakin 60 cents tax, lol. I just moved to PA from NJ 4 years ago. We left NJ because of the taxes, well...lol Welcome to PA!

  33. Sales tax in TN is 9.25%. My county has an additional .5% on top of that, so I pay 9.75% dales tax on everything but food, which is 8.75%.

  34. I am in NJ and our tax is 7%. The states with a higher sales tax pays ALOT less on property taxes! Anyway, I was looking up to see if it was legal to charge the taxes on s/h just like everybody else that ended up here. I guess it is legal :cry:

  35. Yep, I just got the shocker today myself when (almost) ordering the new DtvPal from Dish. Never paid tax on shipping before today in PA. Must of happen within a year or so. All the governors have been moaning about the 'net' taxes they are not getting and decided to up the taxes on shipping, is all I can figure.

  36. I just ordered from Just My Size and once I got my items I to seen that they charge tax on S&H . I had never heard of that , but by the same token , I equate ALL aspects of buying . I could have easily gotten into my vehicle and driven to our local WalMart and purchased these items , but gas being $4.50 a gallon + my time + wear & tear on my vehicle .. not to mention I HATE parking and walking a mile before you can come to your item and wrestling your way thru Joe Public :roll: ... I am very happy to sit here in the comfort of my own surroundings and have it delivered to my door . :mrgreen: So... once I figure in all these factors .. I come out ahead of the game .. EVEN with the sales tax . :wink:

  37. Good Morning...boy am I glad I came across this site.
    I work for Premier Designs, direct sales jewelry. I had a show last night and a guest would not pay tax on the S&H. I didn't make an issue out of it but explained that this is how Premier's order forms are (everyone pays a set $2.50 S&H regardless of their purchase which is preprinted on the forms under the retail. You add the retail to the $2.50 then figure 5% tax)

    She paid the tax on the retail then added the S&H. This guest did book a show with me, however, I did tell her that I will be charging her guests tax on the S&H unless I hear otherwise from Premier.

    She basically told me that I better get something in writing stating that it isn't against the law in MA or her guest won't pay. I went online to the MA depart. of revenue, but NOTHING IS CLEAR THERE! Very frustrating.

    Can anyone give me some insite and a very direct "yes or no" whether it is or isn't against the law in MA to tax S&H??

    thanks so much!
    Susan

  38. It appears the consumer does not feel tax in owed on labor and shipping costs, known as the S&H.

    Most of the tax laws state personal property is taxable in a sales transaction thus, most consumers don't or won't purchase items that include tax on the shipping and hadleing fee. Could be when S&H is computed into a sale, some vendors believe they owe the government a tax for this.

    I doubt it. If it is not written, it does not apply. If you cannot find the rule, it probably does not exist and most consumers who pay attention, are the ones who would likely know how they have been charged in other transactions so, by experiences, consumers should know better. Especially the ones who question the idea in the first place.

    Tax on shipping? Bogus
    Tax on "handling" another perk thus, bogus.

    I've been buying via catalog and online for over 30 years. I've never been asked to pay tax on shipping or handling especially when the vendor is out of state, tax doesn't apply at all on any order unless the vendor has sales presence within the state they will ship to.

    A simple resolution would be to do business with those who don't tax the S&H. Let them go figure and make a fair attempt to retain their customers by being FAIR and knowlegeable on the subject. No point in paying tax when the vendor "thinks" the tax could apply therefore, giving the gov't a tax they don't deserve.

  39. Here's an order form from pampered chef. I don't know how old it is, but it does state that s&h is not taxed in MA.
    http://tomhagens.com/pampered_chef/pampered_chef_order_form.pdf

  40. Jill~
    Thank you so much! This was Great! I sent it to Premier and we'll see what they have to say. I did write to them to get a response and their accountant did write back, but again, nothing in layman's terms. This will help alot!
    Thanks!
    Susan

  41. OK, I see a lot of talk on this e-mail chain about Red and Blue states. Lots of chatter about whether the business has a presence in the state, and even more discussion about whether they business is charging a tax on the shipping part, the handling part, or both.

    All I have to add is that I live in the great state of California, which I love dearly, and recently my DirecTV box stopped working. So I called to complain, and DirecTV agreed to send out a new box to me provided that I agree to send them the old one back. DirecTV also told me that I would be charged $19.95 for shipping and handling. All good, right.

    The new box comes, I install it. I mail the old one back and days later the invoice comes charging me the $19.95. All good again, until I look at the bottom of the invoice where I come to find that they charged me $1.55 (or 7.7%) on the shipping and handling charge. That is a tax levied on BOTH the shipping and handling amount.

    I found this suspect, so I all the DirecTV customer service. After waiting nearing 20 minutes, I speak to a customer service rep who tells me he doesn't know. So I ask him to check with his supervisor, which he does, and after another 15 minutes I am told that the tax is "state based". In other words it is a tax that is levied by the state. Uncertain as to whether that it true or not, I ask to speak with his supervisor.

    While waiting on hold, I search online and find this site (which is great by the way). That's when I read through this chain and come to find there are a lot of nuances to the issue. All fine. After waiting another 10 min or so, the customer service rep comes back on to transfer me to his supervisor whereupon I am promptly disconnected!!!!

    All I wanted is a straight answer as to whether the tax is properly applied to shipping me a replacement DirecTV box set. The company clearly wasted my time and it will play into whether I renew my subscription with them.

    I think it is up to us as consumers and taxpayers to expect good customer service, pay the taxes that we owe, but with the understanding that companies charging tax have an obligation, a duty, to clearly state up-front the taxes that will be assessed and why they are being assessed to the consumer. Basically, an obligation to explain what will be charged, no different than the labeling laws we have on consumer goods such as food and drink.

    Just my 2 cents from sunny CA!!

    Jim

    1. I own a business, and I know that your charge of s/h on the dish would not be right in my state! Shipping and handling is taxable in my state - TX - but, it is only taxable if the goods you receive have a charge that is taxable. For example, if you buy a couch and have it delivered and you pay for the charge of the couch and shipping on the same ticket, it is taxable. If you had a coupon or redemption or somehow got your couch at no charge, but was still charged s/h for the delivery of the couch - since there was no charge on the good, the shipping is not taxable. That is how it works in the state of TX as described by state tax law as well as clarified by my accountant.

  42. Hi Susan,
    Let me know what they say!
    Jill

  43. JIM~
    Awesome note~ and Jill, I will fill you all in once I hear form Premier.

    Some people might think, in Jim's case, "oh please, it's JUST $1.55" or in my case "it's JUST 13 cents (5% of $2.50), but it adds up and if it's wrong, IT'S WRONG!

    In my business, if I have 30 people at a show that will not pay the 13 cents per order, that's about $4.00 that comes out of my pocket. Not to mention that if I book shows from this one show where people won't pay, the snowball effect starts to happen and that $4 becomes $8 which becomes $16 etc...

  44. Okay....I have had to research this for myself for my job. In the State of MA if the shipping and handling is listed as a separate line item then sales tax is NOT charged on the S & H but on the merchandise itself. If the S & H is included in the total selling price (ie. $499.00 including S & H) then sales tax IS charged because you can not seperate the amount of the shipping from the merchandise itself so sales tax IS cahrged on the total amount. Jill, it is possible that the state of the company that you work for does require them to collect and remit sales tax based on that state, however, the sales tax is based on the state that the item is being shipped to not where it is being shipped from. You should check with someone at your corporate office on that.

    If you order form a mail order company and they do NOT charge any sales tax it is because they do not have a significant presence it the state the merchanides is being shipped to and do not need to collect and remit sales tax. The obligation is with the purchaser at that point to submit the sales tax to their state.

  45. I got the following email from Premiers accountant:

    Susan,

    In regards to delivery charges in Massachusetts...many companies would be exempt for delivery charges in your state. Rules for an out-of-state wholesaler are not always the same as in-state companies. As such, there are several exceptions to the delivery exemptions in Massachusetts. These are dependent on such variables as delivery charges vs. freight (see the comment below from the State of Massachusetts). Other exceptions to consider are whether the shipping charges are separately contracted for and how closely the posted delivery charges equate to actual costs. An individual consumer usually does not have enough information available to be able to weigh these factors as most of the information needed is not available to the public. This is true in every state...not just Massachusetts.

    Many direct mail companies base their fees on cost of the product, not how much it weighs or the bulkiness of the package. For instance, a single sleeveless silk shirt that costs $110 cost more in shipping fees than five pairs of $20 blue jeans.

    II. DIRECTIVE

    ISSUE: How does the Massachusetts sales tax apply to a transportation charge associated with the sale of tangible personal property?

    DIRECTIVE: A transportation charge, i.e., a charge by the seller of tangible personal property for preparation and delivery of goods to a location designated by the purchaser is excluded from the sales price subject to tax. Charges for transporting property to the vendor as “freight-in” charges are not “transportation charges” within the meaning of this Directive. Freight-in charges are part of the vendor’s overhead and are included in the sales price subject to tax.

    I also received this~

    I certainly understand your frustration over this issue. Let me first say that I have forwarded a request to obtain an updated response from the State. While this tax law has not changed in several years, the MA Department continues to publish "clarifications" of their intent. Any policy changes/interpretations must be approved and in writing by the State based on our proprietary relationship with the State and with our jewelers. As I can not determine when to expect a response, I have your email flagged and will let you know when I have something back in writing.

    Be aware that each direct sales company has unique policies and procedures and therefore, the tax treatment can be different from one company to another. Premier constantly monitors state law changes and if we see that a law has changed or been reinterpreted, we will both comply with the new law and update the jewelers in that state. As you commented in your email, there is a lot of gray area when it comes to taxation. At this time, only OK and WY have requested that Premier not charge tax on this item.

    my upline, Bobbie:

    Bobbie wrote back to her stating that it should not be up to the company, rather the state as to whether S&H are taxed

    and she got this reply:

    Bobbie,

    To clarify, direct sellers each have different policies as to: when possession passes (when they receive the goods vs. when the product leaves our dock), what description is used on the invoice, is the shipping separately contracted for, who is the 'shipper' (common carrier or other), the terms of sale in each company's contract, the definition of the independent contractor (commissioned salesperson vs agent vs employee) and how much power the jeweler has over the sale of the product, how closely the s&h costs mirror the company's actual costs of packaging and delivering, to whom they deliver (end customer vs jeweler) and that state’s definition of delivery charges, shipping and handling, etc. Some direct sellers ship "inventory" direct to their representatives, who later resale the products from that inventory (in this case, the S&H is more like "freight in" which is specifically taxable in MA) others as in Premier do not require the jeweler to keep any inventory. These policies and many others may throw one direct seller into a taxable category while having different answers to the above policies may throw it into the non-taxable category. I apologize if it sounded like MA would deal differently with different taxpayers with the same procedures. [Though, there are even exceptions to this in that at least one state granted a tax exemption for direct sellers whose home office is located in that state; every other direct seller in that state must charge sales tax. As a state is its own government, for the most part, it can do whatever it wants..while still having to report their rulings to their constituents.]

    My cousin is a lawyer and he's looking into this for me~

  46. Kodera said on November 16, 2006:

    Isn't it wonderful living in a big blue state like Fast Eddie Rendell's Pennsylvania. It's hard to find sympathy for people who live in this type of state. The voters continually vote for the tax loving democrats. Live it...Love it...spend it.

    Just want to comment on that.
    Don't fool your self all members in the government love taxes. Not just the Democrats, Why?? Let me tell you, Taxes are what pay for the country Debt.
    As it stands today The United States of America owes a total of $9,654,777,417,877.43 and is increasing 1.9 billion dollars a DAY! looking at that a 7-8 % sales tax is nothing and will continue to do nothing to that debt. With the way Americans are spending money (is imaginary money to by the way with a debt that big) I am surprised the dollar is still worth any thing. If you were to take the total population of America (304,660,725) and divide it by the total debt, each American would have a total debt of $31,690.26. So next time you are looking at those $300 D&G Jeans or that Luxury SUV or even applying for another credit card think of paying of that debt first. Then spend only the cash you have in your pocket!

  47. ok,
    I was just charged sales tax on a purchase on ebay and the guy charges 8.0% here in NY. Even though in my county its 7.5%. But he lives in Western NY which I might add is (traditionally always) a Republican section of NY. So the guy who took a pop shot at the Democrats back off!! Even though I am an independent!
    I regress, I was annoyed at this guy gouging me an extra dollar on an already too expensive ebay purchase. Simply shipping envelopes is what I was buying for some of my auctions. But when I add it all up its almost better off that I use toilet paper for shipping items cause between ebay's listing fees Paypals cut of the action and ebays cut of the action and my meager auction sale price its a total joke what you wind up making and why I bother to keep trying to sell on ebay :mad: I have no idea :mad: ! !! :mad: :mad: :mad: :mad: :mad: :mad:

  48. so to be back on the top.
    is it legal to charge tax on shipping in the "state" (capital) of D.C. i tried to find it everywhere but still no response.. help :mad:

  49. About 2/3 of all states currently tax shipping charges in one form or another, and that tax depends on the shipping destination and not necessarily the origin.

    As for the question about PA: Yes, PA does tax shipping with certain exceptions. This is noted in PA Code, Title 61, Part I, Subpart B, Article II, Chapter 54. (http://www.pacode.com/secure/data/061/chapter54/chap54toc.html)

    I also gather from the Connecticut General Assembly's website that DC does not levy a tax on shipping charges, but I could be wrong. (http://www.cga.ct.gov/2005/rpt/2005-R-0262.htm)

  50. Ever order from the great institution National Geographic? They base their shipping charges on price of the item, not weight. Then, they levy tax on the cost of the item plus shipping. For a $140.00 item cost, $18.95 shipping and $11.52 tax. The 7.25% tax based on the cost of the item plus tax, an extra $30.47 charge.

  51. I'm late weighing in, but I just noticed my purchase with Victoria Secret was taxing me on my shipping. I buy a lot online and just noticed this. I live in CA. I don't know where VS is but more and more I can't see the "deals" online when tax and shipping is now included!

  52. BIG NEWS TO YOU!!! THEY all do it. WHY? Because the corporations are being TAXED TO DEATH. Guess what people? All that taxing of the EVIL RICH is coming right down to little 'ol me and you. Consumers end up footing the bill, and the leaders in congress keep fooling people that they are helping them by taxing the RICH. All that does, it cause job loss and taxes being raised, either through your salary or the goods you buy OR both!!!! WAKE UP AMERICA!!!!

  53. Just beware if you come under a sales and use tax audit. YOu are liable to pay even if the selling party does or does not collect the tax or collects the wrong amount.

  54. the problem I have is if a merchant ships through the post office, how can a state charge sales tax on the portion that is a U>S> government service?

    1. I'm not a tax attorney, but here's my understanding: Regardless of how the item is shipped, state taxes are meant to be independent of federal taxes. Therefore whether you ship via UPS or USPS, the state taxation laws will apply to your shipping charge.

  55. Cara said on January 22, 2009:

    And I will continue to vote democrat. I think you need to do your homework. :twisted:

    Wow, snappy comeback for a message that's 26 months old. :roll:

    But, looks who's talking! ;-)

  56. Yeah, good discussion here. I was just about to call Macy's and complain that they charged me tax on shipping, but figured I'd at least do a quick internet check to see if others had this problem also. So now I know, my state taxes shipping! Funny thing is I've been buying stuff online for 10 years and don't ever recall this happening before. Good reason to only use websites with free shipping, though they no doubt fold that cost back into the product cost and so even there is was paying tax on shipping all along, just in that case it was invisible to me so I didn't care! ;o)

  57. Can the state charge a sales tax on the shipping if the US Postal Service is being used for shipment? For instance, what if the seller states that the US Postal Service is used for shipping and the cost is an additional $5.00; can a state collect a sales tax on that $5.00 going to the US Postal Service?

  58. Pilm said on January 15, 2010:

    Yeah, good discussion here. I was just about to call Macy's and complain that they charged me tax on shipping, but figured I'd at least do a quick internet check to see if others had this problem also. So now I know, my state taxes shipping! Funny thing is I've been buying stuff online for 10 years and don't ever recall this happening before. Good reason to only use websites with free shipping, though they no doubt fold that cost back into the product cost and so even there is was paying tax on shipping all along, just in that case it was invisible to me so I didn't care! ;o)

    Wow! I read every comment on here and it wasn't until I got to the one written by Pilm that the light went on. For any online merchants reading this, just roll the shipping, handling, and taxes into the cost of the item(s) being sold. Then as a consumer, I can compare apples with apples. Call it "Out the door" pricing. So to paraphrase Pilm, as long as it is invisible to me I don't care. I usually don't go through life with my head in the sand, however, as a father of two daughters, I have found that sometimes ignorance is bliss... Good health and prosperity to all!

  59. I just noticed Smartbargains does this. I hadn't noticed before.
    Wonder if Overstock is going to start as well.
    I cancelled an order with Nordstroms today because of this.
    2 - 19.90 items turned into $26 each with S/H and all the tax.
    Decided to purchase at the store myself since I'm close.

    WA. is taxed at nearly 10% and they are trying to raise it to 11%.
    It is not an easy state to do business in either.......

  60. hey idiots - once you're done talking shit to each other, can someone please simply answer the original poster's question?

    typical american idiocy - hey let's call everyone else stupid and maybe the original issue will just disappear...

    fucking morons...

    1. Nice...! I think that when your mother told you to use your words when you were upset, she meant your grown up words. Since writing isn't your forte, I'm going to assume that reading isn't either. The original question regarding the permissibility of sales tax on shipping charges was answered quite thoroughly. You may want to read all of the responses prior to posting an ignorant response. (Hint: You only need to read the first sentence of the first response by Ed Hand) Suggested reading

  61. Vaasu said on December 13, 2009:

    i'd rather pay taxes than give power to the republicans. i think we've seen what they can do (or should i say, can't do). one of those things being the inability to keep partisan talk out of an answer to a simple question about sales tax.

    I think your cronies have made you believe the big lie.

    Dumocrats never cease to amaze me at just how blind they can be.

    Wasn't it Clinton that only slapped the hand of Osama for attacking a United States Ship? Wasn't it this that helped to embolden them into believing they could do as they pleased (9/11) with no real retaliation? Wasn't it (9/11) that caused the war in Afghanistan?
    Wasn't it Clinton's failed diplomacy that caused Saddam to continue to thumb his nose at the USA and the world? Isn't it true that ALL the worlds intelligence agencies believed Saddam to be in possession of WMD's? (so President Bush did not lie as the Dumocrats say (lie).

    Wasn't all of this the underlying problem of our economy?

    Please take the blinders off.

    1. Uh no...it wasn't 9/11 that caused the war in Afghanistan. Our Republican war crimnals invaded IRAQ which has nothing to do with 9/11. We invaded a stable country and destabilized the entire region and created this an entirely new breed of terrorist. And it was proven that the so called WMD 'intelligence' didn't exist. Bush and his war criminal VP just keep feeding it to their pet media and called any questioners or protesters unpatriot.

      And the underlying problem with our economy is MATERIAL GREED. You can't keep spending when the money doesn't exist. This is from the government on down to the individual living on their credit cards and buying houses they can't afford.

      And anyway what in the hell does this have to do with sales tax in S/H? Both of which are generally over inflated anyway. AK charges sales tax on labor for crimeny sakes...They call it a service. I pointed out to the borough that they have companies with employees pay sales tax on their labor dollars. But a contractor has to charge his/her clients sales tax for any labor performed.

  62. shipping is labor and you dont or cant charge tax on labor

    1. Depends on your state, actually. In Texas, you must pay tax on both goods and services (labor). Stinks, but it's state tax law here. :(

  63. California, on January 1, 2010, now requires merchants tax shipping/handling fee's.

    I presented issue with one vendor who told me, we're very sorry but we are now required to do so. I've purchased for years from this source so, they didn't tax shipping before, now they are told to.

    Just another lame way for over paid politicians and over employed California government to run amuck. Soon, it'll be civil war/riots. We have 9.75% sales tax here, the highest in the nation, gasoline pump taxes that are highest in the nation and the list go on and on.

    Did I mention California "has no money". That's strange, the money is being collected...who spending it, a drunken sailor(s)?

  64. KDB said on September 18, 2007:

    Most states do this. The key is that you're being charged shipping & HANDLING.

    They're basically taxing the handling. Otherwise, people would charge $1 for the item and $50 for the handling, thus avoiding taxes.

    Companies report all income. But the their shipping charges count as an expense, so that washes out.

    And if you don't like paying taxes, try building your own highway some time...

    This is absolute pap. The handling charges are built into the profit margin in most cases. I can see that if vendors continue to add costs and fees to 'bait and switch' customers who do online business, there will be no incentive for people to use the internet for purchases. .other than mild convenience. And frankly I don't see how paying taxes on my shipping will build a freeway any faster, considering that in California, the government has been raiding the tax revenues for highway funds to pay for their gross mismanagement of the economy in the first place.

  65. Ron said on July 1, 2010:

    shipping is labor and you dont or cant charge tax on labor

    Yes it can if your state calls labor a service. Alaska does it. I was a contractor working for about a dozen merchandising companies. I had to charge them sales tax for my time. I pointed out to the borough that a company doesn't pay taxes on it's employee labor dollars, why should an independent contractor? Just another way to collect money AND make it difficult on a small business.

    But shipping isn't labor (except for the time putting it in a box and that isn't really classified as labor), it is a service.

  66. Here in TN, the *state* sales tax is 7% on everything except food. Food is taxed at 5.5% - Add to that our local *county* sales tax, 2.25%, and you get a total of 9.25% for non-food and 7.75% for food. As of at least 1997, shipping and handling charges *are* taxable. And for anyone who cares, we are a red state.

  67. But in TN, there is no personal income tax, so it is a little misleading for everyone to just state what they pay for any one tax. You have to account for all taxes paid on all items to do an apples to apples comparrison between states.

    As for shipping, I have never charged tax on the shipping amount before, but I guess I better look into whether or not I should be!

  68. But we're not doing a comparison of all taxes per state; the whole thread is about sales tax on shipping. I was just trying to provide that information for anyone who did not know. If someone had asked about state income tax, I would have provided that information; but they didn't.

  69. Here's the California plan on sales tax or the franchise tax board. Tax is 9.75 %.

    Mailed order sub total is $100. Shipping is free. Total is $109.75.
    Mailed order sub total is $100. Shipping $5. Total is $105. Tax is $9.75.
    Mailed order sub total is $100. Shipping/handling is $10. Tax is $10.73.

    The key, per the FTB, is; if the retailer doesn't keep sepperate records on the final shipping fee's for each sale, the state says they have to collect sales tax on the entire sale including shipping and handling. The reason is, the state wants to be able to see the shipping as a sepperate entry on their accounting and if it's all co-mingled with the sale totals only, they cannot confirm if the retailer is collecting the correct amount so to make all easy for the auditors/state, they just simply fold their hands and say, TAX 'EM.

    So, retailers who decide not to keep records on shipping here in CA, they will, or are supposed to, tax to total amount.

    Those who want to compete with us shoppers will keep shipping records for the state to monitor and then, there's no tax. Mind you if they do keep records, there's no tax on handling either so, no tax on shipping and/or handling if separate records are kept by the retailer.

    Those retailers and e-tailers who want to be lazy will pass the taxes onto us. Those who don't will get my business.

  70. Ford Company charged me tax on shipping which sucks. 26 bucks shipping on a 30 dollar order was not bad enough but to add tax on shipping should be illegal

  71. I totally agree...California tried to sales tax labor years ago and I think just about all businesses called their congressmen/representatives and discouraged them to bother trying to get that tax passed. They left it alone once they got enough feedback.

    Shipping is not a luxury item, it's not personal property nor is it a tangible asset. It's simply a service or labor fee. No tax should apply or else it would be cheaper to make the purchase a the local Ford dealer, they don't charge for shipping unless you need it faster than normal time periods.

  72. Pennsylvania is now trying to get consumers to compute their own sales tax for out of state purchases either online or catalog since businesses without a physical presence in PA cant be forced to collect it. When you file 2011 taxes there will be a box asking how much your taxable items where sales tax wasnt collected and then you have to compute how much you owe and pay it. They just announced this. So you are expected to have kept your receipts? How many people do that? Then you have to list each place you bought from and total all the numbers then total them all. You could put $0 which most people will due. Odds are the state will never know about it but technically they could fine you and/or send you to jail for lying on a return. I guess now everyone will have to waste countless hours not only recording all purchases, making their way thru the complex state tax rules then computing all this. Do they expect regular people to all hire tax accountants?

    There are so many weird exceptions to the sales tax. Umbrellas are taxes, raincoats arent. Regular shirts arent, while Bowling shirts are. Golf and bowling shoes are, basketball and tennis shoes arent. Pumpkin for eating is not taxed but if you use it for decoration its supposed to be. What if you put it out for decoration on the porch for a couple of weeks then use if for pie filling and eat it? Howz that work? LOL. Politicians stuck all these strange exceptions into the code over the years.

    Then there is the issue of buying anything in Ebay from an ordinary person. They rarely collect sales tax so you are now expected for figure this all out depending on what the item is and whats its to be used for. They apparently want you to list these peoples names, addresses and phone numbers too! Hello Big Brother.

    Of course at the Federal level people are supposed to actually compute capital gains/losses for item sold on Ebay (probably for the the states too). Selling some old junk left by your dead relatives? Supposedly you are criminal if you dont. How many people hold yard sales or sell via newspaper ads or just to a neighbor? Which is just a no tech version of Ebay, then you might be a tax criminal.

    Dont know if they classify people in Philly who drive to sales tax free Delaware to load up on expensive stuff then drive back to PA. I know people who do this. Are they tax evaders/criminals?

    I wouldnt be surprised if they started measuring the amount of gasoline in your tank if you live on the border of a state with lower gasoline taxes (hence lower prices) to determine if you are going there to fill up your tank and evade PA's higher gas taxes. Gasoline prices in Ohio for iinstance are always lower than PA because they have lower gas taxes.

    Its not that people dont want to pay any taxes at all, its just the tax laws have become so complicated over time that practically everyone is breaking the law in some way. Here are the taxes I know I pay or have paid.

    Federal Income Taxes - 47% of taxpayers, most at the low end, pay nothing net or get back more than they paid due to various tax credits, so they dont pay this one.
    State Income Tax
    Social Security Tax
    Medicare Tax
    State Sales Tax
    Local Income Tax
    Local Property Tax
    County Property Tax
    School Property Tax
    License Tax
    Vehicle Taxes
    Gasoline Taxes
    Various Utility Taxes
    Sewage Surcharge Tax (extended this twice - will likely never go away)
    Real Estate Transfer Tax
    Capital Gains Taxes
    Dividend Taxes
    Local Per Capita Tax
    School Per Capita Tax
    State Unemployment Fund Tax

    Some of them are small but they add up like crazy and there are many others that are hidden in the cost of the product like taxes business pay. Businesses simply imbed taxes into the prices of products.

  73. Im mildred from philippines.i would like to ask if i still need to pay tax during the claiming time of purchase.i orderd bag from spore thru internet and i already paid the shipping and its already cleared by custom, but suddenly post office ask me to pay postal service fee.i paid and i thought i can claim my package immidiatly after paying the postal service fee,, but after that they ask me to go inside thier office they said they want to open my package and check whats inside.i cant do anything coz they already opened it.when they saw whats inside of my package they started to compute the prices and started to issue a coupon receipt which written the amount of tax that i need to pay its more than 3k almost haf of my orderd price,,,i didnt pay coz i want to find out about this matter,,,pls answer me immidiatly..thanks and regards..

  74. I found a site that published a chart by state:
    State Taxable
    Shipping
    Arizona NO
    Arkansas YES
    California NO
    Colorado NO
    Connecticut YES
    Florida NO
    Georgia YES
    Hawaii YES
    Idaho NO
    Illinois NO
    Indiana YES
    Iowa NO
    Kansas YES
    Kentucky YES
    Maine NO
    Maryland NO
    Massachusetts NO
    Michigan YES
    Minnesota YES
    Missouri NO
    Nebraska YES
    New Jersey NO
    New York YES
    North Carolina YES
    Ohio YES
    Pennsylvania YES
    South Carolina YES
    Tennessee YES
    Texas YES
    Utah YES
    Vermont NO
    Virginia NO
    Washington YES
    West Virginia NO
    Wisconsin YES

    1. Our box for our TV that is through Century Link (Qwest) went out the other day so I called to get a replacement.
      They are charging $19.99 for shipping plus tax, and this is Arizona.
      Soon we will be charged tax every time we flush the toilet.
      Unbelievable world we live in!!


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