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FAQ Articles

Are freight, delivery or other transportation charges subject to sales tax?

Effective October 1, 2005, all freight, delivery and other transportation charges are considered a part of the selling price. If the sale is taxable, the freight, delivery and other transportation charges that are part of the sale when billed by the seller are always taxable. This includes other transportation charges such as “shipping and handling” charges or fuel surcharges. If the product being delivered is exempt from sales tax, then the freight, delivery, and other transportation charges are also exempt. Lump sum freight charges related to the sale of tangible personal property should be prorated when the charge applies to the shipment of both taxable and nontaxable personal property. A retailer not prorating the freight charges for taxable and non taxable changes will cause all the freight charges to be taxable.

Delivery charges billed directly to the customer by a third party delivery service that are not making the sale of tangible personal property remain exempt from sales and use tax.

nd.gov - The Official Portal for North Dakota State Government
North Dakota: Legendary. Follow the trail of legends

Ryan Rauschenberger
Tax Commissioner
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FAQ Articles

Are freight, delivery or other transportation charges subject to sales tax?

Effective October 1, 2005, all freight, delivery and other transportation charges are considered a part of the selling price. If the sale is taxable, the freight, delivery and other transportation charges that are part of the sale when billed by the seller are always taxable. This includes other transportation charges such as “shipping and handling” charges or fuel surcharges. If the product being delivered is exempt from sales tax, then the freight, delivery, and other transportation charges are also exempt. Lump sum freight charges related to the sale of tangible personal property should be prorated when the charge applies to the shipment of both taxable and nontaxable personal property. A retailer not prorating the freight charges for taxable and non taxable changes will cause all the freight charges to be taxable.

Delivery charges billed directly to the customer by a third party delivery service that are not making the sale of tangible personal property remain exempt from sales and use tax.

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