IDAPA 35.01.02.061 — TRANSPORTATION, FREIGHT, AND HANDLING CHARGES (RULE 061)

Sections 63-3612, 63-3613, Idaho Code
01.
In General. Whether or not transportation and handling charges are separately stated, the sales
price includes any charges made for delivery of goods to the seller. Charges for transportation and handling of goods
to the consumer are not included as a part of the sales price regardless of when title passes.
(3-31-22)
02.
Charges Not Separately Stated. Regardless of other provisions of this rule, transportation and
handling charges which are not separately stated are included in the taxable sales price.
(3-31-22)
03.
Example 1: Charges for Delivery to the Seller. A customer orders goods from a retailer. The
goods are shipped to a catalog store where the customer picks them up. A charge to the customer for delivery to the
store is a charge for delivery to the seller and is included in the taxable sales price.
(3-31-22)
04.
Example 2: Freight-In Taxable. A seller of construction equipment orders a part for a customer.
The seller separately states on the invoice charges for freight-in to the seller and freight-out to the consumer. The
charges for freight-in are part of the taxable sales price. The charges for freight-out are not taxable.
(3-31-22)
05.
Example 3: Delivery by Retailer. A consumer orders building materials from a retailer. The
retailer delivers the goods to the buyer by means of the retailer's delivery van. The retailer separately states the charge
for transportation and handling of the building materials. Since the charge is for delivery to the consumer, it is not
subject to sales tax.
(3-31-22)
06.
Example 4: Use of Transportation Charges as a Means of Avoiding Sales Tax. Seller offers to
give away merchandise worth approximately twenty dollars ($20) if the buyer pays shipping of nineteen dollars and
ninety-five cents ($19.95). The entire price of nineteen dollars and ninety-five cents ($19. 95) is taxable.
(3-31-22)
IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.02
State Tax Commission
Idaho Sales & Use Tax Administrative Rules
Section 062
Page 57
07.
Demurrage. Demurrage charges are not taxable if right, power, and control of the ship, freight car,
or truck remains with the transportation company. Demurrage is defined as a charge by a transportation company to
its customer for detaining a ship, freight car, or truck beyond the time allowed for loading or unloading.
(3-31-22)