Is Shipping Taxable in New York? New York Sales Tax Rules for Shipping and Delivery Charges

Is Shipping Taxable in New York?

In New York, shipping and delivery charges included on a seller’s bill are generally taxable when the product or service being shipped or delivered is taxable.

The New York State Department of Taxation and Finance explains that the terms shipping and delivery also include charges identified by terms such as transportation, handling, or postage.

Source: New York State Department of Taxation and Finance, Shipping and Delivery Charges https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/shipping_and_delivery_charges.htm

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General Rule: Shipping Is Taxable When the Product or Service Is Taxable

New York generally treats shipping and delivery charges as taxable when the underlying product or service is taxable.

For example:

Product price: USD 100 Shipping charge: USD 8 Taxable amount: USD 108

If the product is taxable, New York sales tax generally applies to the full USD 108 amount.

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Does Separately Stating Shipping Make It Non-Taxable?

Generally, no. In New York, the main question is whether the product or service being shipped or delivered is taxable.

For example:

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

If the product or service is taxable, the USD 8 delivery charge is generally taxable even if separately stated.

This is different from states where separately stated shipping may be excluded from the taxable sales price.

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What Counts as Shipping and Delivery in New York?

New York’s rule covers more than charges labeled simply as “shipping.” The terms shipping and delivery also include charges identified by terms such as:

• transportation;
• handling;
• postage;
• other similar delivery-related labels.

For example:

Product price: USD 100 Shipping charge: USD 8 Handling charge: USD 3 Postage charge: USD 2 Taxable amount: USD 113

If the underlying product is taxable, these charges are generally taxable as well.

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Shipping for Nontaxable Products or Services

Because New York generally follows the taxability of the underlying item or service, shipping or delivery charges may be non-taxable when the product or service being shipped or delivered is not taxable.

Examples may include:

• exempt products;
• nontaxable services;
• sales for resale;
• transactions supported by a valid exemption certificate;
• other exempt or excluded transactions under New York rules.

For example:

Nontaxable product price: USD 100 Shipping charge: USD 8 Total: USD 108

If the underlying product is nontaxable, the related shipping charge may also be non-taxable. Sellers should keep proper documentation.

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Mixed Orders: Taxable and Nontaxable Items

Some orders include both taxable and nontaxable items. In these cases, sellers should carefully review how shipping and delivery charges are allocated.

Sellers should:

• identify taxable and nontaxable items;
• check whether the tax engine allocates shipping correctly;
• review whether the order involves split shipments;
• retain order-level tax calculation records.

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Common Compliance Issues for Ecommerce Sellers

Assuming separately stated shipping is exempt

In New York, separately stating shipping does not generally make it non-taxable when the underlying product or service is taxable.

Ignoring handling and postage charges

New York includes transportation, handling, and postage within shipping and delivery. These charges may be taxable when connected to taxable sales.

Taxing only the product price

If the seller excludes shipping or delivery charges from the taxable amount for taxable New York sales, the seller may under-collect tax.

Misclassifying exempt transactions

If the seller treats shipping as exempt because the underlying sale is exempt, the seller should retain exemption certificates, resale certificates, and product taxability documentation.

Applying another state’s rule to New York

Shipping taxability varies by state. New York should be configured separately from states with different delivery charge rules.

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Practical Tips for Sellers Shipping to New York

Sellers shipping goods or delivering taxable services to New York customers should first determine whether the underlying product or service is taxable. If it is taxable, shipping and delivery charges included on the seller’s bill should generally be included in the taxable amount.

Sellers should also review whether transportation, handling, postage, and similar charges are included in the tax calculation. For marketplace and direct sales, platform settings should align with New York’s rules. Sellers should retain invoices, checkout records, shipping records, exemption certificates, order details, marketplace reports, and sales tax filing records.

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Conclusion

In New York, shipping and delivery charges included on a seller’s bill are generally taxable when the product or service being shipped or delivered is taxable. Shipping and delivery also include charges labeled as transportation, handling, or postage.

For ecommerce sellers, the key takeaway is clear: New York shipping charges generally follow the taxability of the underlying product or service.

Source: New York State Department of Taxation and Finance, Shipping and Delivery Charges https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/shipping_and_delivery_charges.htm