Wisconsin Administrative Code › Department of Revenue › Chapter Tax 11 - Sales And Use Tax › Subchapter X - Administrative Provisions › Section Tax 11.94 - Delivery charges

Current through June 24, 2024
(1) DEFINITION. "Delivery charges" is defined
				in s.
				77.51(2m),
				Stats., to mean charges by a seller to prepare and deliver tangible personal
				property, or items, property, or goods under s.
				77.52(1) (b), (c),
				or (d), Stats., or services to a location
				designated by the purchaser of the tangible personal property, or items,
				property, or goods under s.
				77.52(1) (b), (c),
				or (d), Stats., or services, including
				charges for transportation, shipping, postage, handling, crating, and
				packing.
(2) TAXABILITY OF DELIVERY
				CHARGES.
(a) When a seller charges a
				purchaser for the delivery of taxable tangible personal property or items,
				property, or goods under s.
				77.52(1) (b), (c),
				or (d), Stats., the seller's total charge,
				including any delivery charge, shall be subject to the sales or use tax. It is
				immaterial whether delivery is made by the seller's vehicle, a common or
				contract carrier, or the United States postal service.
Example:
Retailer A sells clothing to Customer B
				  for $100. Retailer A also charges Customer B $10 for delivery of the clothing.
				  Retailer A delivers the clothing to Customer B at a Wisconsin address for which
				  the total applicable sales and use tax rate is 5%. The correct computation of
				  the tax due is as follows:
Selling price of clothing .........
$100.00
Delivery charge ................
-
10.00
Subtotal ...................
$110.00
Tax at 5% ($110 x 5%).......
-
5.50
Total ......................
$115.50
(b)
				When a seller charges a purchaser for the delivery of nontaxable or exempt
				tangible personal property or items, property, or goods under s.
				77.52(1) (b), (c),
				or (d), Stats., the seller's total charge,
				including any delivery charge, is not subject to the sales or use
				tax.
(c)
1. If a shipment includes both taxable and
				nontaxable property and items the seller shall determine and set forth on the
				invoice the portion of the delivery charge reasonably allocable to the taxable
				property and items. The portion allocated to nontaxable property and items is
				not taxable. If no allocation is made, the total delivery charge shall be
				taxable.
2. The allocation in subd.
				1. is computed based on either:
a. The total
				sales price of all of the property and items subject to tax as compared to the
				total sales price of all of the property and items included in the
				shipment.
b. The total weight of
				all of the property and items subject to tax as compared to the total weight of
				all of the property and items included in the shipment.
(d) A Wisconsin purchaser who
				purchases taxable property and items without tax for use in Wisconsin is
				subject to the use tax or sales tax pursuant to s.
				Tax
				11.14(2) (c) based on the "purchase
				price" of the property and items to the purchaser. The "purchase price" shall
				include delivery charges paid by the Wisconsin purchaser to the seller for
				shipment of the property and items to the purchaser. The "purchase price" does
				not include delivery charges paid by the Wisconsin purchaser to a carrier
				independent of the seller when the purchaser arranges for the transportation.
Example:
If the "delivered price" of a carload
				  of lumber is $6,000, including delivery charges, and the purchaser pays the
				  delivery charges directly to the common carrier and deducts the payment from
				  the amount due the seller, the delivery charges are borne by the seller and are
				  included in the seller's measure of the tax.