Rule 560-12-2-.45 - Freight, Delivery and Transportation(1) "Delivery charges" means charges by the seller of tangible personal property or services for preparation and delivery to a location designated by the purchaser of the tangible personal property or services, including but not limited to charges for transportation, shipping, postage, handling services, crating, and packing; fuel surcharges; split shipment charges; small order charges; and other similar charges. The term "delivery charges" does not include postage charges for the delivery of direct mail when the postage charge is passed on dollar-for-dollar without being marked up to the purchaser of the direct mail and separately stated on an invoice or other similar billing document given to the purchaser.(2) Where taxable tangible personal property is sold at retail and the seller makes a delivery charge, the charge is taxable regardless of whether the charge is optional (i.e., not required to complete the underlying sale of the tangible personal property) or separately stated.(3) Where taxable tangible personal property is sold at retail and the seller handles the shipping transaction as agent for the purchaser, the delivery charge is not taxable so long as:(a) the seller maintains an escrow account on behalf of the purchaser for delivery charges;(b) the seller maintains separate invoicing for delivery charges, reflecting escrow deposits and withdrawals;(c) the seller maintains books and records reflecting the deposits, withdrawals, and the balance of the delivery escrow accounts maintained for each customer;(d) the contract between the seller and the purchaser prohibits the seller from financing or marking up the delivery charges;(e) the contract between the seller and the purchaser requires the purchaser to deposit funds for delivery charges into the escrow account in advance of delivery; and(f) the contract between the seller and the purchaser states that the purchaser pays shipping cost and takes responsibility for the property when it leaves the seller's premises.(4) Charges made for the transportation of tangible personal property are not subject to sales tax when the transportation charges are not associated with a taxable sale of tangible personal property.(5) If a transaction between a dealer and a customer includes both taxable items and nontaxable items, the dealer may either charge and collect tax on the entire delivery charge or charge tax on a portion of the delivery charge based on either (i) the percentage of the sales price of the taxable property compared to the total sales price of all property in the shipment, or (ii) the percentage of the total weight of the taxable property compared to the total weight of all property in the shipment. The dealer must maintain records supporting the calculation of taxes on delivery charges.(6) Examples: (a) A seller of taxable tangible personal property arranges for a third party carrier to deliver items to the purchaser. The seller charges the purchaser the actual cost of delivery that the third party carrier charges the seller. The delivery charge from the seller to the purchaser is a taxable charge.(b) A seller of taxable tangible personal property arranges for a third party carrier to deliver items to the purchaser. The carrier bills the purchaser directly, and the purchaser pays the carrier directly. The delivery charge is not taxable.(c) An individual pays a moving company to move his furniture from his home to a storage facility. The charge made by the moving company for the transportation of tangible personal property is not taxable because it is not associated with the taxable sale of tangible personal property. Charges made by the moving company for moving boxes, packing paper, and other tangible personal property are subject to sales tax.(d) The purchaser of taxable tangible personal property arranges with a third party carrier to pick up items at the seller's location and deliver the items to the purchaser. As in examples (b) and (c), the delivery charge is not taxable because the carrier, rather than a seller of tangible personal property, is making the charge.(e) A retailer purchases inventory for resale and pays a delivery charge to the vendor. Because the purchase is a nontaxable purchase for resale, the delivery charge is not taxable.(f) A retailer purchases tax exempt inventory for resale and taxable items for use in the retailer's business. The tax exempt property is $75 and 75 pounds, and the taxable property is $25 and 25 pounds. The seller delivers the items in one shipment for a fee of $6. The seller may either charge tax on the entire $6 delivery fee or charge tax on 25% ($1.50) of the delivery fee based on either (i) the percentage of the sales price of the taxable property compared to the total sales price of all property in the shipment (25%), or (ii) the percentage of the total weight of the taxable property compared to the total weight of all property in the shipment (25%).Ga. Comp. R. & Regs. R. 560-12-2-.45
O.C.G.A. §§ 48-2-12, 48-8-2, 48-8-3.
Original Rule entitled "Freight, Delivery, and Transportation" was filed and effective June 30, 1965.Amended: F. Feb. 5, 1991; eff. Feb. 25, 1991.Amended: Title changed to "Freight, Delivery, and Transportation. "F. Jul. 14, 2014; eff. Aug. 1, 2014.