In our previous blogs we shared insights about determining your tax research, the taxability of your products, and the taxability of your customers. Next up is determining the taxability of shipping and freight charges.
When shipping is free you don’t need to worry about whether to charge your customer sales tax on it or not. But what about the other 364 days of the year when shipping may not be free? There are so many things you must consider: what’s being shipped, where it’s being shipped, how it’s being shipped, and even to whom it’s being shipped.
States have particular rules on how shipping and handling is subject to sales tax. Is the freight charge separately stated, does it include handling, is the handling optional or mandatory? Are the items you’re shipping exempt from tax? All of them, none of them, mixed bag? In order to properly charge tax to your customers, you must consider all of the above and have a tax policy in place that not only supports your business requirements, but also the ever-changing world of tax law.
When it comes to tax, the other 364 days are just as important as Free Shipping Day. Ensuring that you’re properly collecting tax from your customers is necessary for both audit and compliance purposes as well as customer satisfaction. Does your tax automation system account for the growing complexities of tax on freight? Does it provide peace of mind that you’re not over or under-charging your customer?
Stay tuned for the next post which will provide insights and action plans to support heavy transaction volumes during peak seasons.
Contact us today to learn how we’ve got you covered for Shipping and Freight Charges during this holiday peak season. And for Free Shipping Day – and those other 364 days!
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ONESOURCE Indirect Tax provides powerful tax automation software combined with the most comprehensive global tax content (supporting over 15,800 taxing authorities in the U.S. and in over 180 countries) arming customers with a single tax engine that enforces tax rules and accurately calculates sales, use, and VAT taxes. ONESOURCE Indirect Tax can be deployed in either the cloud or on premise to accommodate companies of all sizes.