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Know if delivery charges are tax deductible?

Shipping and handling charges listed together are subject to tax in the State of Michigan. Delivery charges, resulting from delivery by the seller or a contract carrier, collected by the seller are subject to tax, if the seller is not also engaged in a separate delivery service business. Delivery charges, resulting from delivery by the seller or a contract carrier, collected by the seller are not subject to tax, if the seller is also engaged in a separate delivery service business.

Revenue Administrative Bulletin 1993-7 provides additional information on this subject. Delivery charges, resulting from delivery by a common carrier or postal service, collected by the seller are subject to tax if ownership of the item is transferred upon delivery to the purchaser. Delivery charges, resulting from delivery by a common carrier or postal service, collected by the seller are not subject to tax, if the ownership of the item is transferred prior to delivery to the purchaser. Department of Treasury Sales and Use Tax Rule, 1979 AC, R 205.124.




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