According to the Tennessee Department of Revenue, Delivery charges are considered part of the
sales price of an item if the seller charges the customer for the delivery. The
state says that it doesn’t matter if the delivery charges are stated separately
on the invoice, are included in the lump sum total, or what the terms of the
shipping are.
On its website, the
Tennessee DOR makes it clear that this statue supersedes the prior Sales and
Use Tax Rule 1320-5-1-.71. That rule was replaced in 2008 when Tennessee became compliant with the
Streamlined Sales and Use Tax Agreement, which makes shipping and delivery
charges a part of the sales price.
Because the charges
are considered part of the sale, retailers should always charge sales tax on
delivery charges. The only exception to this rule is if the items sold are
exempt from taxes — in that case, sellers should not charge sales tax on
shipping.
