Is shipping taxable in Maryland?
by January 20, 2024
Please note: This blog was originally published in 2021. It’s since been updated for accuracy and comprehensiveness.
So you have sales tax nexus in Maryland and you’ve made a sales to a customer there. Should you charge sales tax on the shipping charges you charge to your customer? Let’s take a look at shipping taxability in Maryland.
Is shipping taxable in Maryland?
It appears that sellers will not have to pay sales tax on shipping, as long as the shipping charge is separately stated on the invoice. The shipping charge must also be separated from any handling fee. If it’s combined with a handling or processing fee, then the shipping charge is taxable.
Handling Maryland shipping and handling sales tax with TaxJar
The TaxJar app defaults to the most common Maryland scenario – that shipping and handling is non-taxable. However, if your business does charge sales tax on shipping, then TaxJar’s Shipping & Handling Override allows you to update that in your state tax settings. This will make the Maryland Expected Sales Tax Due Report more accurate. This will also tell the TaxJar API to charge sales tax on Maryland shipping. Learn more about how TaxJar treats shipping and handling here. And to learn more about TaxJar and get started, visit TaxJar.com/how-it-works.
Takeaway
You are not required to charge sales tax on shipping charges to customers in Maryland as long as you separate out any “handling” charges on the invoice you send to your customer. (Handling charges are taxable.)
Ready to automate sales tax? Sign up for a free trial of TaxJar today
Please note: This blog is for informational purposes only. Be advised that sales tax rules and laws are subject to change at any time. For specific sales tax advice regarding your business, contact a tax advisor.
