A retailer’s charge for delivery and handling of taxable products is subject to the same state and municipal sales tax as the product when delivered in South Dakota. If the product is not taxable, the delivery and handling charges are not taxable.
Delivery charges are the charges by the retailer for preparation and delivery to a location designated by the purchaser of tangible personal property, products transferred electronically, or services.
- Delivery charges include transportation, shipping, postage, handling, crating, and packing.
- Delivery surcharges or fuel charges are considered delivery charges.
- If a retailer hires a transportation company and bills the customer for the transportation service, the retailer must include the transportation charges in their taxable receipts.
- If both taxable and nontaxable products are in the same shipment, sales tax is due on the portion of the delivery charge for the taxable products. This is determined by using a percentage of the sales price of the taxable products compared to the total sales or weight of the taxable products compared to the total weight of all property in the shipment.
Examples:
1. Jones furniture sells and delivers a chair to Mr. Smith in Mitchell. Jones Furniture charges $500 for the chair and $50 for delivery. 4.2% state sales tax plus 2% Mitchell sales tax applies to the total charge of $550.
2. A manufacturer sells and delivers products to a retailer in Murdo, SD. The retailer provides the manufacturer with an exemption certificate. Sales tax does not apply to the products or delivery charge because the products purchased are for resale and not subject to sales tax.
3. Jones furniture sells and delivers the following to Fred’s Furniture in Pierre: a sofa for resale for $1000 and a desk for the owner’s office for $500. The delivery charge is $100. Fred gave Jones an exemption certificate for the sofa. Taxable shipping is determined by using the ratio of taxable products ($500) to total sale ($1500); 33% of the $100 delivery charge is taxable. Jones charges 4.2% state sales tax plus Pierre municipal sales tax on $533 ($500 for the desk plus $33 delivery).
Click here to view the full South Dakota Delivery Charges bulletin dated July 2023.
A retailer’s charge for delivery and handling of taxable products is subject to the same state and municipal sales tax as the product when delivered in South Dakota. If the product is not taxable, the delivery and handling charges are not taxable. Delivery charges are the charges by the retailer for preparation and delivery to a location designated by the purchaser of tangible personal property, products transferred electronically, or services. Delivery charges include transportation, shipping, postage, handling, crating, and packing. Delivery surcharges or fuel charges are considered delivery charges. If a retailer hires a transportation company and bills the customer for the transportation service, the retailer must include the transportation charges in their taxable receipts. If both taxable and nontaxable products are in the same shipment, sales tax is due on the portion of the delivery charge for the taxable products. This is determined by using a percentage of the sales price of the taxable products compared to the total sales or weight of the taxable products compared to the total weight of all property in the shipment. 1. Jones furniture sells and delivers a chair to Mr. Smith in Mitchell. Jones Furniture charges $500 for the chair and $50 for delivery. 4.2% state sales tax plus 2% Mitchell sales tax applies to the total charge of $550. 2. A manufacturer sells and delivers products to a retailer in Murdo, SD. The retailer provides the manufacturer with an exemption certificate. Sales tax does not apply to the products or delivery charge because the products purchased are for resale and not subject to sales tax. 3. Jones furniture sells and delivers the following to Fred’s Furniture in Pierre: a sofa for resale for $1000 and a desk for the owner’s office for $500. The delivery charge is $100. Fred gave Jones an exemption certificate for the sofa. Taxable shipping is determined by using the ratio of taxable products ($500) to total sale ($1500); 33% of the $100 delivery charge is taxable. Jones charges 4.2% state sales tax plus Pierre municipal sales tax on $533 ($500 for the desk plus $33 delivery). A retailer’s charge for delivery and handling of taxable products is subject to the same state and municipal sales tax as the product when delivered in South Dakota. If the product is not taxable, the delivery and handling charges are not taxable. Delivery charges are the charges by the retailer for preparation and delivery to a location designated by the purchaser of tangible personal property, products transferred electronically, or services. Delivery charges include transportation, shipping, postage, handling, crating, and packing. Delivery surcharges or fuel charges are considered delivery charges. If a retailer hires a transportation company and bills the customer for the transportation service, the retailer must include the transportation charges in their taxable receipts. If both taxable and nontaxable products are in the same shipment, sales tax is due on the portion of the delivery charge for the taxable products. This is determined by using a percentage of the sales price of the taxable products compared to the total sales or weight of the taxable products compared to the total weight of all property in the shipment. 1. Jones furniture sells and delivers a chair to Mr. Smith in Mitchell. Jones Furniture charges $500 for the chair and $50 for delivery. 4.2% state sales tax plus 2% Mitchell sales tax applies to the total charge of $550. 2. A manufacturer sells and delivers products to a retailer in Murdo, SD. The retailer provides the manufacturer with an exemption certificate. Sales tax does not apply to the products or delivery charge because the products purchased are for resale and not subject to sales tax. 3. Jones furniture sells and delivers the following to Fred’s Furniture in Pierre: a sofa for resale for $1000 and a desk for the owner’s office for $500. The delivery charge is $100. Fred gave Jones an exemption certificate for the sofa. Taxable shipping is determined by using the ratio of taxable products ($500) to total sale ($1500); 33% of the $100 delivery charge is taxable. Jones charges 4.2% state sales tax plus Pierre municipal sales tax on $533 ($500 for the desk plus $33 delivery). A retailer’s charge for delivery and handling of taxable products is subject to the same state and municipal sales tax as the product when delivered in South Dakota. If the product is not taxable, the delivery and handling charges are not taxable. Delivery charges are the charges by the retailer for preparation and delivery to a location designated by the purchaser of tangible personal property, products transferred electronically, or services. Delivery charges include transportation, shipping, postage, handling, crating, and packing. Delivery surcharges or fuel charges are considered delivery charges. If a retailer hires a transportation company and bills the customer for the transportation service, the retailer must include the transportation charges in their taxable receipts. If both taxable and nontaxable products are in the same shipment, sales tax is due on the portion of the delivery charge for the taxable products. This is determined by using a percentage of the sales price of the taxable products compared to the total sales or weight of the taxable products compared to the total weight of all property in the shipment. 1. Jones furniture sells and delivers a chair to Mr. Smith in Mitchell. Jones Furniture charges $500 for the chair and $50 for delivery. 4.2% state sales tax plus 2% Mitchell sales tax applies to the total charge of $550. 2. A manufacturer sells and delivers products to a retailer in Murdo, SD. The retailer provides the manufacturer with an exemption certificate. Sales tax does not apply to the products or delivery charge because the products purchased are for resale and not subject to sales tax. 3. Jones furniture sells and delivers the following to Fred’s Furniture in Pierre: a sofa for resale for $1000 and a desk for the owner’s office for $500. The delivery charge is $100. Fred gave Jones an exemption certificate for the sofa. Taxable shipping is determined by using the ratio of taxable products ($500) to total sale ($1500); 33% of the $100 delivery charge is taxable. Jones charges 4.2% state sales tax plus Pierre municipal sales tax on $533 ($500 for the desk plus $33 delivery).
