Appendix: Merchandise Delivery, Freight, Handling, Postage, and Shipping Charge  

  1. Basic Information
  2. Sales Tax - Delivery and Handling
  3. Where to get help
What to KnowFilter
Basic Information

For the purposes of this appendix, the term “delivery charge” is used to refer to delivery, freight, handling, postage, and shipping charges in general.

  • Delivery of materials, goods, or equipment (“merchandise”) may be provided by the vendor, US Postal Service, United Parcel Service (UPS), express delivery services, contract carrier, or common carrier.
  • Delivery charges may either be included in the charges for merchandise; or shown as a separate charge on an invoice.
Sales Tax - Delivery and Handling

The chart below summarizes important sales tax information related to delivery and handling charges:

Type of Transaction CA Sales Tax? Notes
The delivery charge billed by the vendor is the same or less than the actual delivery charge assessed by the common carrier, contract carrier, United Parcel Service, US Mail Service, or express delivery service. No  
The delivery charge billed by the vendor is more than the actual delivery charge assessed by the common carrier, contract carrier, United Parcel Service, US Mail Service, or express delivery service Partial 1
The delivery is made by the vendor’s own delivery fleet. Yes  
The delivery charge is included in the unit price of the goods purchased. Yes 2
The sales agreement specifies that delivery is included in the price charged for the merchandise Yes  
Merchandise handling charge Yes  

  1. The portion of the delivery charge exceeding the actual delivery charge is subject to sales tax
  2. The invoice indicates that delivery is included in the unit price, e.g. $6.50 per bale, including delivery”

Please refer to the other appendixes for general information about sales and use tax.

Where to get help

Contact the Financial Administrative Services and Transactions/Accounts Payable Office (FAST/AP) for assistance with delivery-related questions.