Internet Auction Sales and Purchases (Publication 177)
Shipping and Delivery Charges

Shipping and delivery charges

Tax does not apply to separately stated charges for delivery of property from the retailer's place of business or other point from which shipment is made directly to the purchaser, provided the delivery is by other than the facilities of the retailer (by United States mail, independent contract or common carrier). Handling charges are a service related to the sale and are subject to tax when related to a taxable sale. Please see publication 100, Shipping and Delivery Charges.

A retailer selling merchandise for an artificially low price and then charging an excessive amount for "shipping" without payment of tax on the excessive shipping charge would be understating taxable sales. Since the law provides that only the actual cost of shipment is exempt from tax, the difference between the actual cost of shipment and the amount charged for shipping would be subject to tax.