Is Shipping Taxable in South Carolina? South Carolina Sales Tax Rules for Delivery Charges
In South Carolina, delivery charges may be included in the sales and use tax measure depending on the delivery method and sales terms. Under South Carolina Revenue Ruling RR19-9, delivery charges are generally taxable when delivery is made by the retailer’s truck, by common carrier under F.O.B. destination terms, or by direct factory shipment where transportation is paid by the seller. Delivery charges are generally not included in the tax measure when delivery is by common carrier and the sale is F.O.B. point of origin.
On this page
- Is Shipping Taxable in South Carolina?
- General Rule: Delivery Charges Can Be Taxable
- Taxable Delivery Charge Scenarios
- Non-Taxable Scenario: Common Carrier and F.O.B. Point of Origin
- Why F.O.B. Terms Matter
- Does Separately Stating Delivery Make It Non-Taxable?
- Common Compliance Issues for Ecommerce Sellers
- Practical Tips for Sellers Shipping to South Carolina
- Conclusion
Is Shipping Taxable in South Carolina?
In South Carolina, delivery charges may be included in the measure of sales and use tax depending on the delivery method and sales terms.
Under South Carolina Revenue Ruling RR19-9, delivery charges are includable in the measure of sales and use tax when the seller sells tangible personal property and charges for delivery:
- by use of the retailer’s truck;
- by use of a common carrier when the sale is made F.O.B. point of destination or the buyer’s place of business;
- by delivery from the factory directly to the seller’s customer when transportation is paid by the seller.
Delivery charges are not includable when delivery is made by common carrier and the sale is F.O.B. point of origin, also known as shipping point.
Source: South Carolina Department of Revenue, Revenue Ruling RR19-9 https://dor.sc.gov/sites/dor/files/policies/RR19-9.pdf
General Rule: Delivery Charges Can Be Taxable
South Carolina does not treat all delivery charges the same way. The tax treatment depends on the delivery arrangement.
For example:
Product price: USD 100 Delivery charge: USD 8 Taxable measure: USD 108
If the delivery charge falls into one of the includable categories under South Carolina’s rule, sales tax generally applies to the full USD 108 amount.
Taxable Delivery Charge Scenarios
1. Delivery by the retailer’s truck
If the seller uses its own truck to deliver taxable tangible personal property, the delivery charge is generally included in the tax measure.
Example:
Product price: USD 100 Retailer’s truck delivery: USD 8 Taxable measure: USD 108
2. Delivery by common carrier under F.O.B. destination terms
If the seller uses a common carrier and the sale is F.O.B. destination or the buyer’s place of business, the delivery charge is generally taxable.
Example:
Product price: USD 100 Common carrier delivery, F.O.B. destination: USD 8 Taxable measure: USD 108
3. Factory direct shipment paid by the seller
If goods are delivered from the factory directly to the seller’s customer and the transportation is paid by the seller, the delivery charge is generally included in the sales and use tax measure.
This includes situations where the seller pays a transportation company, pays the manufacturer, or credits the customer for transportation costs paid by the customer and deducted from the seller’s invoice.
Non-Taxable Scenario: Common Carrier and F.O.B. Point of Origin
South Carolina provides an important non-taxable scenario. Delivery charges are not includable in the measure of sales and use tax when the seller sells tangible personal property and charges for delivery by common carrier, and the sale is made F.O.B. point of origin, or shipping point.
Example:
Product price: USD 100 Common carrier delivery, F.O.B. shipping point: USD 8 Total: USD 108
If the sale is truly F.O.B. point of origin and delivery is by common carrier, the delivery charge is generally not included in the tax measure.
Why F.O.B. Terms Matter
South Carolina’s rule depends heavily on whether the sale is F.O.B. destination or F.O.B. point of origin.
F.O.B. destination generally means the seller remains responsible for delivery to the buyer’s designated destination. Under South Carolina’s rule, delivery charges for common carrier delivery under F.O.B. destination terms are generally taxable.
F.O.B. point of origin generally means the buyer takes responsibility at the shipping point. Under South Carolina’s rule, common carrier delivery charges under F.O.B. point of origin terms are generally not included in the tax measure.
For ecommerce sellers, this distinction should be supported by invoices, order terms, contracts, checkout terms, or other records.
Does Separately Stating Delivery Make It Non-Taxable?
Not necessarily. South Carolina’s rule does not turn only on whether the delivery charge is separately stated. The key factors are delivery method, F.O.B. terms, and whether transportation is paid by the seller.
A separately stated delivery charge may still be taxable if delivery is by the retailer’s truck, by common carrier under F.O.B. destination terms, or by factory direct shipment where transportation is paid by the seller.
Common Compliance Issues for Ecommerce Sellers
Focusing only on separate statement
South Carolina requires a more detailed analysis than simply checking whether shipping is separately stated.
Not documenting F.O.B. terms
If the seller wants to support non-taxable treatment under F.O.B. point of origin terms, the records should clearly support those terms.
Confusing common carrier delivery with retailer delivery
Delivery by the retailer’s truck and delivery by a common carrier can produce different tax results.
Overlooking factory direct shipment
Factory direct delivery to the seller’s customer may be taxable when transportation is paid by the seller.
Applying another state’s rule to South Carolina
Shipping taxability varies by state. South Carolina should be configured separately from states with different delivery charge rules.
Practical Tips for Sellers Shipping to South Carolina
Sellers shipping tangible personal property to South Carolina customers should review delivery method and F.O.B. terms carefully. Delivery by the retailer’s truck, common carrier delivery under F.O.B. destination terms, and seller-paid factory direct shipments should generally be treated as includable in the sales and use tax measure.
If sellers rely on the F.O.B. point of origin exception, they should keep clear documentation, such as invoices, terms and conditions, carrier records, contracts, order confirmations, marketplace reports, and sales tax filing records.
Conclusion
In South Carolina, delivery charges are generally taxable when delivery is made by the retailer’s truck, by common carrier under F.O.B. destination terms, or by factory direct shipment where transportation is paid by the seller.
Delivery charges are generally not includable in the sales and use tax measure when delivery is by common carrier and the sale is F.O.B. point of origin, or shipping point. For ecommerce sellers, the key takeaway is clear: South Carolina shipping taxability depends on delivery method, F.O.B. terms, and who pays for transportation.
Source: South Carolina Department of Revenue, Revenue Ruling RR19-9 https://dor.sc.gov/sites/dor/files/policies/RR19-9.pdf