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Does Magento charge tax on shipping?
Hello. If your business isn't collecting the appropriate sales tax on shipping and handling charges, you may run afoul of state and local sales tax laws. Many states have specific rules about how to bill the purchaser, for example, whether handling and shipping – or related terms such as "delivery," "freight" or "postage" are included in the total cost or if t are itemized together or separately. Sales and Shipping Tax is Location Specific Many states and local governments require you to charge taxes on sales at your physical location, as well as on the telephone, online or mail-order sales to residents of states where your business has a "nexus" – a physical presence, such as a retail storefront. This is important to keep in mind when expanding to a new state, even if your own state does not require sales taxes or if your state regulates shipping and handling taxes differently from your customer's state. Clarify Your State's Regulations Check the state tax laws to determine if any sales taxes should be collected on shipping and handling charges and under what circumstances. Differences occur based on if these charges are stated separately or if you use a common carrier or make deliveries yourself. Many states exempt specific goods, typically including gift cards and coupons as well as some – but not all – foods. Also, tax charges may not be required of certain exempt organizations. I hope this helps
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If you work for a shipping company, or if you buy goods to ship from your inventory, you can check with your company's insurance agent and insurance carrier to see how you might qualify to charge sales taxes.
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