There is no national rule for sales tax on shipping. Whether a delivery charge is taxable depends on the state where the buyer takes possession, how the charge appears on the invoice, and whether the item being shipped is itself taxable. The multistate model law, the Streamlined Sales and Use Tax Agreement (SSUTA), treats delivery charges as part of the taxable sales price by default, so shipping is taxable unless a state elects to exclude it. This guide gives the state-by-state answer.
Is Shipping Taxable? The Short Answer
Shipping is taxable in most states when the item shipped is taxable. Roughly half of US jurisdictions tax delivery charges on taxable goods even when the charge is separately stated, a second group exempts separately stated shipping if conditions are met, and five states have no statewide sales tax. The SSUTA default rule is that delivery charges sit inside the taxable sales price unless a state affirmatively excludes them, per the SSUTA Library of Definitions.
| Group | Rule for delivery charges | Jurisdictions | Source |
|---|---|---|---|
| Generally taxable | Taxable when the underlying sale is taxable, even if separately stated | 28 states + DC | SSUTA default rule (SSUTA, amended through May 16, 2024) |
| Exempt if separately stated | Not taxable when itemized separately and conditions are met | 18 states | State DOR guidance (see table below) |
| No statewide sales tax | No state sales tax on shipping (Alaska allows local tax) | 5 states | State DOR guidance |
Is Shipping Taxable in Your State? (50-State Table)
Shipping taxability splits into three groups, verified against Department of Revenue (DOR) guidance and SSUTA membership. Last reviewed: July 13, 2026. As of the current roster, 23 states are Full Member States of the Streamlined Sales Tax (SST) Governing Board and follow the SSUTA “delivery charges” definition, per the SST state membership roster. State rules change, so confirm your state before filing.
Group 1: Delivery charges taxable when the sale is taxable (even if separately stated)
| State | Key condition | Source |
|---|---|---|
| Arkansas, Indiana, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Ohio, Rhode Island, South Dakota, Vermont, Washington, West Virginia, Wisconsin | Taxable per SSUTA default; excluded only if state opts out | SST Governing Board roster (2026) |
| Georgia | Taxable regardless of separate statement or optionality | Ga. Comp. R. & Regs. r. 560-12-2-.45 (GA DOR) |
| Texas | Taxable when the item sold is taxable, even if separately stated | 34 TAC §3.303 (Texas Comptroller) |
| New York | Follows the underlying sale; taxable if the item is taxable | NY Tax Bulletin TB-ST-838 (NY DTF) |
| Connecticut, District of Columbia, Hawaii, Mississippi, New Mexico, Pennsylvania, South Carolina, Tennessee | Taxable when tied to a taxable sale | State DOR guidance |
Group 2: Delivery charges exempt if separately stated and conditions are met
| State | Key condition | Source |
|---|---|---|
| California | Common carrier, separately stated, charge at or below actual cost | CDTFA Pub. 100 / Reg. 1628 |
| Florida | Separately stated and the buyer can avoid the charge (e.g., pickup) | Fla. Admin. Code R. 12A-1.045 (FL DOR) |
| Illinois | Exempt unless shipping is an “inseparable link” to a taxable sale | Illinois DOR guidance |
| Alabama, Arizona, Colorado, Idaho, Iowa, Louisiana, Maine, Maryland, Massachusetts, Missouri, Nevada, Oklahoma, Utah, Virginia, Wyoming | Exempt when separately stated (common carrier / optional delivery) | State DOR guidance |
Group 3: No statewide sales tax
| State | Key condition | Source |
|---|---|---|
| Alaska | No state tax; local jurisdictions may tax via the Alaska Remote Seller Sales Tax Commission | State DOR guidance |
| Delaware, Montana, New Hampshire, Oregon | No statewide sales tax on shipping | State DOR guidance |
How Do States Tax Shipping Charges?
Taxability turns on four levers the seller controls or can check: how the charge is presented on the invoice, whether handling is combined with shipping, the delivery method, and whether the underlying item is taxable. Get these four right and you can reason through any state. Each lever is covered below, with the pivotal one, separate statement, first because it is the single most actionable choice a seller makes.
Does Separately Stating Shipping Make It Exempt?
Sometimes, but only in states that offer the exclusion. Under SSUTA, delivery charges are part of the taxable sales price unless they are separately stated on the invoice and the state has elected the exclusion, per the SSUTA sales-price rules. If you bundle shipping into the item price, it is taxable everywhere the sale is taxable. Separate statement is the trigger, but Texas, Georgia, and New York tax it anyway.
Are Shipping and Handling Taxed Differently?
Yes. Handling is treated as a taxable service in most states, so a combined “shipping and handling” line can make the whole charge taxable even where pure shipping is exempt. In California, a separately stated “handling” charge is not a separate statement of transportation, and only the actual postage portion of a combined charge can be excluded, per CDTFA Regulation 1628. Best practice: list shipping and handling as distinct line items.
Does the Delivery Method Change Taxability?
Yes, in several states. Delivery by common carrier (United States Postal Service (USPS), UPS, FedEx) is more often exempt when separately stated, while delivery in the seller’s own vehicle is more often taxable. California taxes a delivery charge when the retailer uses its own vehicle, unless title passes to the buyer before transport begins, per CDTFA Regulation 1628. Free On Board (FOB) terms can also shift when title transfers and therefore taxability.
Is Shipping Taxable on Exempt Goods?
No, almost never. Shipping charged on an exempt sale is generally exempt because taxability of the delivery charge follows the taxability of the underlying sale. Georgia’s regulation states that transportation charges not associated with a taxable sale of tangible personal property are not subject to sales tax, per Ga. Comp. R. & Regs. r. 560-12-2-.45. New York applies the same principle in Tax Bulletin TB-ST-838: if the product sold is not taxable, the delivery charge is not taxable.
How Do You Tax Shipping on Mixed Orders of Taxable and Exempt Items?
Allocate the shipping charge to the taxable portion. On a shipment mixing taxable and exempt goods, SSUTA lets the seller tax only the delivery charge allocated to taxable items, using either the percentage of sales price or the percentage of weight of the taxable goods, per the SSUTA allocation rule. If you do not allocate, the entire delivery charge usually becomes taxable. Example: a $60 taxable item and a $40 exempt item ship together for $10; tax 60% of the $10, so $6 of shipping is taxable.
Is Shipping Taxable in California, Texas, and New York?
The answers differ by state. California exempts separately stated delivery by common carrier at actual cost. Texas taxes shipping whenever the sale is taxable, even if separately stated. New York follows the underlying sale, taxing delivery on taxable items. Each state’s full conditions and citation appear below.
Is Shipping Taxable in California?
Not if three conditions are all met. California exempts separately stated delivery charges when the shipment goes directly to the buyer by common carrier, contract carrier, or U.S. Mail, the charge is itemized as delivery on the invoice, and it does not exceed the seller’s actual cost, per the California Department of Tax and Fee Administration (CDTFA). Any flat-rate markup above actual cost is taxable, and with no cost records the entire charge is taxable.
Is Shipping Taxable in Texas?
Yes, when the sale is taxable. Texas Rule 3.303(a) applies sales tax to all transportation and delivery charges billed by the seller when a taxable item is sold, even if the shipping is separately stated. The Texas Comptroller gives this example: a $500 taxable sofa plus a separately stated $50 delivery fee is fully taxable, so the seller collects tax on $550. If the sofa sale is exempt, the $50 delivery is exempt too.
Is Shipping Taxable in New York?
Yes, when the product shipped is taxable. New York Tax Bulletin TB-ST-838, issued by the New York State Department of Taxation and Finance (NY DTF) and updated March 16, 2026, states that shipping or delivery charges are taxable if the product being delivered is taxable, including charges labeled transportation, handling, or postage. On mixed shipments, only the fairly allocated taxable portion is taxable; if not allocated, the whole charge is taxable.
Origin-Based vs Destination-Based: Which Tax Rate Applies to Shipping?
Sourcing decides which rate applies, not whether shipping is in the tax base. Most remote and interstate sales are destination-based, meaning the rate follows where the buyer receives the goods. A handful of states use origin sourcing for intrastate sales, including Texas, California, and Illinois. Do not read “destination-based” as “shipping is taxable.” Sourcing sets the rate; the separate-statement and item-taxability rules decide whether the shipping charge is taxed at all.
Do You Charge Sales Tax on Shipping to Out-of-State Buyers?
Only if you have nexus in the destination state. With no physical or economic nexus in the ship-to state, you have no duty to collect, and no tax applies to the shipping line. After the 2018 South Dakota v. Wayfair decision, states set economic nexus thresholds that trigger collection once your sales or transactions cross a line. Check exposure with Commenda’s US economic nexus guide.
| State | Economic nexus threshold | Source |
|---|---|---|
| South Dakota (Wayfair baseline) | $100,000 in sales or 200 transactions | Commenda US economic nexus guide |
| California | $500,000 in sales | Commenda US economic nexus guide |
| Texas | $500,000 in sales | Commenda US economic nexus guide |
| New York | $500,000 in sales and 100 transactions | Commenda US economic nexus guide |
How Does Drop Shipping Affect Sales Tax on Shipping?
It depends on which party has nexus in the ship-to state. In a drop-ship deal, the retailer takes the order and a third-party supplier ships directly to the customer, creating two sales: a wholesale sale (usually exempt with a resale certificate) and a retail sale (potentially taxable). If the retailer has nexus in the destination state, the retailer collects tax, including on shipping. Some states reject out-of-state resale certificates, pushing collection onto the supplier.
Do You Pay Sales Tax on Shipping When Buying Online?
Yes, when the seller has nexus in your state and your state taxes shipping. If you buy from an Oregon retailer and ship to California, California’s rules govern because California is the delivery state, and the seller collects only if it has California nexus. When the seller does not collect, you may owe use tax directly to your state. In shipping-taxable states, the use tax base includes the taxable shipping charge, so the obligation does not disappear.
How Are International Shipments Taxed? (VAT, GST, and Customs Duties)
International shipments face the destination country’s taxes, not US sales tax. US exports shipped abroad are generally exempt from US sales tax when export is documented. On import, the destination country applies customs duties plus its own Value-Added Tax (VAT) in the EU and UK, or Goods and Services Tax (GST) in Canada, Australia, and India. Shipping is commonly inside the VAT or GST base, because those taxes are usually assessed on the cost, insurance, and freight (CIF) value plus duty. Incoterms decide who pays: Delivered Duty Paid (DDP) puts import tax on the seller, while Delivered At Place (DAP) leaves it to the buyer. Low-value de minimis exemptions exist but are shrinking, so verify current thresholds before you ship.
How Do You Charge Sales Tax on Shipping Correctly?
Follow a repeatable workflow so every invoice lands the same way. The five steps below turn the state rules above into an operational checklist.
- Confirm the delivery state’s rule using the 50-state table above.
- List shipping and handling as separate, distinct line items on the invoice.
- Allocate the delivery charge on mixed shipments by price or weight.
- Apply the destination rate where the buyer receives the goods.
- Automate the calculation so per-state rules and rate changes stay current.
How Commenda Helps You Get Sales Tax on Shipping Right
Shipping taxability changes state by state, and getting Texas, New York, or California wrong is the fastest way to fail an audit. Commenda’s global indirect tax software calculates the correct treatment of shipping charges per state, tracks the shipping amount and tax on shipping as their own line-item fields across US jurisdictions, monitors your economic nexus exposure, and files your returns. Shipping exemption rules are configured per state during onboarding, so the right treatment applies automatically on every invoice.
Check where you have exposure with the US economic nexus guide, and look up destination rates with the Commenda sales tax calculator. Book a demo to get a free review of whether you are collecting tax on shipping in the right states.
