Is shipping in Tennessee taxable?
by April 21, 2024
Please note: This blog was originally published in 2019. It’s since been updated for accuracy and comprehensiveness.
The tough thing about sales tax is that every state has it’s own rules and regulations. This means that some states will require online sellers to charge sales tax on shipping charges, while others do not. Every state has it’s own way of doing things, and some are a little more complicated than others. Today we’re taking a look at the taxability of shipping charges in Tennessee.
Sales tax on shipping in Tennessee
In a nutshell, shipping and handling are both taxable in the state of Tennessee as long as the product being delivered is also subject to sales tax.
Also, if a shipment has both taxable and non taxable products, the seller must charge sales tax based on the percentage of goods that are taxable. The seller has discretion to charge sales tax on the taxable item based on either sale price or on weight.
Handling Tennessee shipping and handling sales tax with TaxJar
The TaxJar app defaults to the most common Tennessee scenario – that shipping and handling is taxable. However, if your business does not charge sales tax on shipping, then TaxJar’s Shipping & Handling Override allows you to update that in your state tax settings. This will make the Tennessee Expected Sales Tax Due Report more accurate. This will also tell the TaxJar API to not charge sales tax on Tennessee shipping. Learn more about how TaxJar treats shipping and handling here. To learn more about TaxJar and get started, visit TaxJar.com/how-it-works.
Takeaway
A seller must almost always charge sales tax on shipping and handling charges for goods sold in Tennessee. For example, if you sell a picture frame for $10, and the shipping and handling charges are $5, then the total taxable amount is $15.
The only exception is if you are shipping a package with a nontaxable item. In that case, shipping and handling are not subject to sales tax.
If a package includes taxable and non taxable items, the seller must charge sales tax based on the percentage of the shipment that includes the taxable item. The seller can choose to measure this percentage either by sale price or by weight of the taxable item.
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Please note: This blog is for informational purposes only. Be advised that sales tax rules and laws are subject to change at any time. For specific sales tax advice regarding your business, contact a tax advisor.
