Taxability

Q: IS FREIGHT TAXABLE?

A: Many factors go into determining whether freight is taxable or not, and you generally need to look at the minutia to get the correct answer. In some states, freight is always taxable. In other states, the freight service must be optional to be exempt; if there is no free option for a local pick-up, it becomes mandatory and taxable. In some states, it must be separately stated and a direct pass-through of costs to not be taxable. Sometimes taxability is determined by where in the sales process the freight charges are incurred. Handling is almost always taxable. Your methods of delivery and how it is invoiced can also have an impact. This just goes to show how a seemingly simple concept can become quite complex very quickly when it comes to sales tax.

Q: ARE CREDIT CARD PROCESSING FEES TAXABLE? 

A:  In general, states define sales price to include the total amount received without a deduction for the cost of the materials used, labor, services, or any other expenses. The credit card processing fees would be taxable if the item being sold is taxable.