Is Shipping Taxable in Mississippi? Mississippi Sales Tax Rules for Delivery Charges
In Mississippi, delivery charges are generally taxable. The taxable gross proceeds of sales include installation charges, delivery charges, and other fees added to the selling price of the property, except finance charges. Delivery charges include fees charged by the seller for transportation of the property being sold. This article explains Mississippi shipping sales tax rules and compliance considerations for ecommerce sellers.
On this page
- Is Shipping Taxable in Mississippi?
- General Rule: Delivery Charges Are Taxable in Mississippi
- Does Separately Stating Shipping Make It Non-Taxable?
- What Charges Are Included in Taxable Gross Proceeds?
- Finance Charges Are the Main Exception
- Common Compliance Issues for Ecommerce Sellers
- Practical Tips for Sellers Shipping to Mississippi
- Conclusion
Is Shipping Taxable in Mississippi?
In Mississippi, delivery charges are generally taxable. The Mississippi Department of Revenue states that taxable gross proceeds of sales include installation charges, delivery charges, and any other fees or charges added to the selling price of the property, except finance charges.
Delivery charges include any fees charged by the seller for transportation of the property being sold.
Source: Mississippi Department of Revenue, Delivery Charges https://www.dor.ms.gov/sites/default/files/notices-technical-bulletins/Delivery%2520Charges.pdf
General Rule: Delivery Charges Are Taxable in Mississippi
Mississippi includes delivery charges in taxable gross proceeds of sales. When a seller charges a customer for delivery, shipping, freight, or transportation of the property being sold, that charge is generally included in the taxable amount.
For example:
Product price: USD 100 Delivery charge: USD 8 Taxable gross proceeds: USD 108
If the product is taxable, Mississippi sales tax generally applies to the full USD 108 amount.
Does Separately Stating Shipping Make It Non-Taxable?
Generally, no. Based on the Mississippi guidance you provided, delivery charges are part of taxable gross proceeds when charged by the seller for transportation of the property being sold.
For example:
Product price: USD 100 Shipping charge: USD 8 Total: USD 108
Even if the USD 8 shipping charge is separately stated, it is generally taxable if it is charged by the seller for transporting the property being sold.
What Charges Are Included in Taxable Gross Proceeds?
Mississippi states that taxable gross proceeds of sales include:
- installation charges;
- delivery charges;
- any other fees or charges added to the selling price of the property;
- except finance charges.
For ecommerce sellers, this may include shipping, delivery, freight, transportation, installation, and other seller-imposed charges connected to the sale of taxable property.
Finance Charges Are the Main Exception
Mississippi’s guidance excludes finance charges from taxable gross proceeds. A finance charge may include a true financing-related charge, such as a separately identified charge for credit or deferred payment.
Sellers should not treat ordinary delivery, handling, processing, or service fees as finance charges unless the fee is genuinely related to financing. Proper contracts, payment terms, invoices, and accounting records should support the classification.
Common Compliance Issues for Ecommerce Sellers
Assuming separately stated shipping is exempt
In Mississippi, delivery charges are generally taxable even when separately stated, if they are charged by the seller for transportation of the property being sold.
Taxing only the product price
If a seller collects tax only on the product price and excludes the delivery charge, the seller may under-collect Mississippi sales tax.
Ignoring installation charges
Installation charges are included in taxable gross proceeds. Sellers that sell appliances, equipment, furniture, fixtures, or other installed products should review installation fee taxability carefully.
Misclassifying seller fees
Fees added to the selling price of property may be taxable unless they qualify as finance charges or another specific exclusion.
Applying another state’s rule to Mississippi
Shipping taxability varies by state. Mississippi should not be configured the same way as states where separately stated shipping is generally non-taxable.
Practical Tips for Sellers Shipping to Mississippi
Sellers shipping taxable property to Mississippi customers should configure shipping, delivery, freight, and transportation charges as taxable when those charges are imposed by the seller for transporting the property being sold.
Sellers should also review installation fees and other seller-added charges. Invoices, checkout pages, order details, carrier records, fee breakdowns, platform reports, and sales tax filing records should be retained to support tax reporting.
Conclusion
In Mississippi, delivery charges are generally part of taxable gross proceeds of sales. Taxable gross proceeds include installation charges, delivery charges, and other fees added to the selling price of the property, except finance charges.
For ecommerce sellers, the key takeaway is clear: Mississippi shipping and delivery charges should generally be treated as taxable when charged by the seller for transportation of taxable property.
Source: Mississippi Department of Revenue, Delivery Charges https://www.dor.ms.gov/sites/default/files/notices-technical-bulletins/Delivery%2520Charges.pdf