Is Shipping Taxable in Louisiana? Louisiana Sales Tax Rules for Shipping, Freight, and Delivery Charges

Is Shipping Taxable in Louisiana?

Louisiana generally treats transportation charges, including shipping, freight, and delivery, as part of the “cost price” and “sales price” for sales and purchases of tangible personal property and digital products. As a result, transportation charges paid to the seller for delivery of taxable tangible personal property or digital products are generally subject to Louisiana state and local sales and use taxes.

This means Louisiana should not be treated as a simple “separately stated shipping is non-taxable” state. The key issue is whether the transportation charge is paid to the seller and connected to the taxable sale.

Source: Louisiana Department of Revenue, Are delivery and freight charges taxable? https://revenue.louisiana.gov/tax-education-and-faqs/faqs/sales-tax-reform/are-delivery-and-freight-charges-taxable/

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General Rule: Transportation Charges Paid to the Seller Are Taxable

Louisiana includes transportation charges in the definitions of cost price and sales price. These charges include:

• shipping;
• freight;
• delivery;
• other transportation charges.

For example:

Product price: USD 100 Shipping charge paid to seller: USD 8 Taxable amount: USD 108

If the product is taxable and the USD 8 shipping charge is paid to the seller, the full USD 108 is generally subject to Louisiana sales and use tax.

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Does Separately Stating Shipping Make It Non-Taxable?

Generally, no. Based on the Louisiana FAQ you provided, separately stating the shipping charge does not automatically make seller-charged shipping non-taxable.

If the purchaser pays the seller for delivery of tangible personal property or digital products purchased from the seller, the charge is generally part of the cost price or sales price and subject to sales tax.

For example:

Product price: USD 100 Freight charge: USD 8 Total: USD 108

If the freight charge is paid to the seller in connection with a taxable sale, it is generally taxable even if separately stated.

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When Are Transportation Charges Not Taxable in Louisiana?

1. Purchaser contracts directly with a third-party carrier

If the purchaser contracts with a third party for delivery and pays the third party directly, those charges are generally not subject to Louisiana sales and use tax.

For example:

Product price paid to seller: USD 100 Shipping paid directly to third-party carrier: USD 8

In this case, the USD 8 charge is not paid to the seller and is generally outside the seller’s taxable sales price.

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2. Seller pays a third-party carrier but does not pass the charge to the purchaser

If a seller contracts with a third party for delivery, the charges paid by the seller to the third party are generally not subject to sales and use tax.

However, if the seller passes those charges on to the purchaser, the amount paid by the purchaser to the seller is considered part of the sales or cost price and is subject to sales tax.

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3. The underlying transaction is excluded or exempt

If the underlying transaction is excluded or exempt from sales and use tax, the transportation charges are also excluded or exempt because they are part of the cost price or sales price of the transaction.

Examples may include:

• sale for resale;
• qualifying exempt purchases;
• transactions supported by a valid exemption certificate;
• other Louisiana exempt or excluded transactions.

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4. Separately stated transportation charges for leases and rentals

Louisiana applies a different rule to leases and rentals. Sales tax is due on the gross proceeds derived from the lease or rental. Transportation charges are not considered part of gross proceeds.

Therefore, separately stated transportation charges associated with the delivery of leased or rented property are generally not subject to Louisiana sales and use tax.

For example:

Equipment rental charge: USD 100 Separately stated delivery charge: USD 8 Total: USD 108

The separately stated USD 8 transportation charge may be non-taxable in the lease or rental context.

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Manufacturer-to-Customer Shipping vs. Manufacturer-to-Seller-to-Customer Shipping

The tax result should be analyzed based on who charges the transportation fee and who pays it, not only the physical shipping route.

Manufacturer ships directly to customer

If the customer contracts directly with a third-party carrier and pays the carrier directly, the delivery charge is generally not taxable.

However, if the seller arranges the manufacturer-to-customer shipment and charges the customer for shipping, the charge paid to the seller is generally part of the sales price and taxable.

Manufacturer ships to seller, then seller ships to customer

If the seller receives the goods and then ships them to the customer, any shipping or delivery charge paid by the customer to the seller is generally taxable when connected to a taxable sale.

Inbound freight from the manufacturer to the seller should be analyzed separately from customer-facing delivery charges.

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Common Compliance Issues for Ecommerce Sellers

Assuming separately stated shipping is exempt

Louisiana generally taxes transportation charges paid to the seller in connection with taxable sales, even when separately stated.

Passing through third-party delivery costs incorrectly

If the purchaser pays the third party directly, the charge is generally not taxable. If the seller pays the third party and then charges the purchaser, the purchaser’s payment to the seller is generally taxable.

Mixing sales with leases and rentals

Louisiana treats transportation charges differently for sales of tangible personal property or digital products versus leases and rentals.

Ignoring exempt or excluded transactions

If the underlying transaction is exempt or excluded, the transportation charge may follow the same treatment. Sellers should retain exemption or resale documentation.

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Practical Tips for Sellers Shipping to Louisiana

Sellers shipping to Louisiana customers should review who receives the shipping payment. If the buyer pays shipping, freight, or delivery to the seller for a taxable sale, the charge should generally be included in the taxable amount.

Sellers should also distinguish customer-paid third-party carrier charges, seller-paid carrier charges that are not passed on, seller-passed-through delivery charges, exempt or resale transactions, and leases or rentals.

For audit support, sellers should retain invoices, order details, shipping records, carrier records, third-party delivery contracts, exemption certificates, resale certificates, marketplace reports, and sales tax filing records.

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Conclusion

In Louisiana, shipping, freight, and delivery charges paid to the seller for delivery of tangible personal property or digital products are generally included in cost price or sales price and subject to state and local sales and use taxes.

Transportation charges may be non-taxable when the purchaser contracts directly with and pays a third-party carrier, when the seller pays a third-party carrier and does not pass the charge on to the purchaser, when the underlying transaction is exempt or excluded, or when separately stated transportation charges relate to leased or rented property.

For ecommerce sellers, the key takeaway is clear: Louisiana shipping taxability depends mainly on who charges and receives the transportation payment, whether the underlying transaction is taxable, and whether the transaction is a sale or a lease / rental.

Source: Louisiana Department of Revenue, Are delivery and freight charges taxable? https://revenue.louisiana.gov/tax-education-and-faqs/faqs/sales-tax-reform/are-delivery-and-freight-charges-taxable/