Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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Annotation 295.1491


295.1491 C. O. D. Sales. A taxpayer in the business of selling beauty supplies makes C. O. D. sales. The taxpayer pays the carriers for freight and C. O. D. charges in advance. The carriers collect the selling price of the merchandise, shipping costs, and C. O. D. fees from the customers and remit the entire amount to the taxpayer. The taxpayer's invoices separately state the merchandise cost, tax on that amount, shipping charges, and C. O. D. fees. The taxpayer believes that the C. O. D. charges are charges for service and, thus, not subject to tax.

Section 6012 provides that "gross receipts" include, among other items, services that are a part of a sale of tangible personal property. The taxpayer's C. O. D. charges are part of the taxpayer's cost of doing business and are paid to the taxpayer for services that are part of the sales that the taxpayer makes. The charges are therefore taxable gross receipts. 6/9/81.