Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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557.0000 TRANSPORTATION CHARGES—Regulation 1628

Annotation 557.0111

557.0111 Delivery Charges—Grocery Store. Taxpayer is a grocer which, for an additional charge of $3.50, will deliver groceries to its customers. The deliveries are made by the taxpayer's vehicle and the sales are not C.O.D. but are charged to the customer's account at the time the order for the merchandise is placed. Since there is no explicit written agreement with the customer passing title to the merchandise prior to delivery, the $3.50 charge for delivery cannot be excluded from the measure of tax when the sale of the goods is subject to sales tax. If an order delivered to a customer consists solely of food products whose sale is exempt from tax, the delivery charges would, of course, not be subject to tax. On the other hand, if the customer's order includes a combination of merchandise, the sale of some of which is taxable and some of which is exempt, the delivery charges should be prorated between taxable and nontaxable portions of the sale. For example, if taxpayer delivers merchandise to its customer totaling $15.00, $10.00 of which is exempt and $5.00 of which is taxable, one third of the delivery charge would be subject to sales tax. 6/25/97.