August 3, 2016

Court Case Decides Missouri Sales Tax on Delivery Charges

The state of Missouri released a notice regarding the recent court case decision which dealt with the taxability of delivery charges.  The law remains the same – In general, if parties intend delivery to be part of the sale of tangible personal property, the delivery charge is subject to tax even when the delivery charge is separately stated on the invoice.  For example:  if you provide an option for a customer to pick up the merchandise or arrange their own shipping, then the delivery charge is not taxable.

For some businesses, like concrete companies, delivery charges are a bit tricky because it’s obviously not easy to pick up wet concrete.  If title transfers before delivery, then delivery charges are not subject to sales tax.  The terms of the sale should determine where title passes and each sale could be different.

If you have any questions about the taxability of delivery charges and how it plays into your business, please contact an Anders State and Local Tax Professional.

Dan Mudd, Partner, dmudd@anderscpa.com or 314-655-5507

Brad Dennigmann, State and Local Tax Manager, bdennigmann@anderscpa.com or 314-655-5558

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