Delivery Charges for Online Grocery Orders

Tuesday, September 27th, 2016

 
 
Man delivering groceries.
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Illinois
Food

Illinois has ruled on how to tax delivery charges when an online grocery purchase includes a mix of items taxed at different rates.

Illinois imposes a tax on the sale of tangible personal property. The tax rate can be either standard or reduced depending on the item sold. Delivery charges are also taxable in some cases. When they are taxable, the rate to apply depends on the items being delivered. If the majority of the selling price is made up of items taxed at the reduced rate, the reduced rate will apply to delivery charges. Otherwise, the standard rate applies.

Delivery charges are taxable when (1) they are lumped together with the cost of groceries or (2) the buyer cannot avoid a delivery charge. In both situations, delivery charges are included in the sales price of the groceries and are thus subject to tax. However, when other options - such as picking up the groceries at a store - are available, separately stated delivery charges are not subject to tax.

http://tax.illinois.gov/LegalInformation/LetterRulings/st/2016/ST-16-0006-PLR.pdf


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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