Delivery Charges Taxable in Missouri

Friday, November 4th, 2016

A haunted house.

The Department of Revenue (DOR) recently ruled that a taxpayer"s delivery charges were taxable.

The taxpayer sold large items, including utility task vehicles and lawn mowers. Some customers could pick up their items at the store but preferred to have them delivered. Other customers could not pick them up at the store and had to have the taxpayer deliver them. The delivery charges were separately stated and paid before delivery took place.

The ruling explains that some delivery charges are taxable as part of the total sales price of taxable items. To determine if the charges are taxable, the DOR looks at (1) when title passes from the seller to the buyer, (2) whether delivery charges are separately stated, (3) who controls the cost and means of delivery, (4) who has the risk of loss during delivery, and (5) whether the seller gets a financial benefit from the delivery.

Here, delivery services were taxable as part the sale of tangible personal property. The delivery charges were on the same invoice as the tangible personal property and were paid at the same time. The taxpayer controlled the cost and means of delivery. It also got a financial benefit by making sales that it might not have made if it did not provide delivery. The delivery charges were separately stated, but that did not mean the parties did not intend for delivery to be part of the sale. As a result, the charges were taxable.

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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.

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