Handling Charges Taxable in Virginia

Monday, June 4th, 2018

Virginia state capital building.

The Virginia Tax Commissioner recently addressed the taxability of handling charges. The taxpayer was a custom homebuilder whose purchases of tangible personal property included shipping and handling charges.

Virginia taxes sales of tangible personal property. Tax applies to handling charges, but it does not apply to separately stated shipping charges. Combined charges for "shipping and handling" are taxable unless documentation is provided showing that the charges are for shipping only. The ruling determined that the charges were taxable, but it granted the taxpayer 45 days to provide proof that the charges were for shipping only.

The ruling also provided the taxpayer the opportunity to submit further evidence regarding purchases the taxpayer claimed were for construction services. Virginia does not generally require contractors to charge tax on tangible personal property. Instead, contractors are responsible for paying tax on the materials they use. Thus, the taxpayer will not owe tax if it shows that the purchases were for construction services rather than tangible personal property.


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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