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Business Taxes Law Guide—Revision 2024
Sales and Use Tax Annotations
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557.0000 Transportation Charges—Regulation 1628
Annotation 557.0233
557.0233 Freight Charges. A joint venture purchased lumber from an out-of-state firm for a delivered price, f.o.b. jobsite in this state. The joint venture paid the freight charges which were deducted from the seller's invoice and netted out of reported purchases subject to use tax.
The lumber was sold for a delivered price and the freight charges should not be netted from the measure of tax. The joint venture ordered the lumber f.o.b. jobsite at a price which included the delivery cost. The seller shipped the lumber freight collect and invoiced at the quoted price, including freight, and then netted out the freight because the lumber was shipped freight collect. Inasmuch as the lumber was sold for a delivered price and invoiced at the delivered price with freight netted out, the charge for freight, no matter who paid it or to whom it was paid, was part of the sales price. 10/10/66.