Understanding the Taxability of Delivery Fees in Kansas

If you are a retailer or a service provider in Kansas, you might want to pay attention to a new law that recently changed how delivery fees are taxed. As of July 1, 2023, you can save on sales tax by separating delivery charges on your invoices.

The new law, passed by the 2022 Legislative Session as House Bill 2136, amended the definition of “sales or selling price” for purposes of the Kansas sales tax. Previously, delivery charges were included in the sales or selling price and were subject to sales tax. Now, delivery charges that are separately stated on the invoice, bill of sale, or similar document provided to the purchaser are not included in the sales or selling price and are not subject to sales tax.

The term “delivery charges” means charges by the seller of personal property or services for preparation and delivery to a location designated by the purchaser. This includes transportation, shipping, postage, handling, crating, and packing. However, delivery charges do not include charges for delivery of direct mail, fuel surcharges, or charge-back for delivery charge on returned goods.

To qualify for the exclusion from the sales tax base, delivery charges must be clearly labeled as charges for delivery, transmission, or transportation on the invoice, bill of sale, or similar document. The delivery charges must also be representative of a true or reasonable cost of delivery based on the underlying products or services sold and provided by either the retailer or service provider directly, or by a third party or agent used by them. 

The new law does not mandate that delivery charges be separately stated on the invoice and the decision of how to prepare and issue a billing statement to a customer is up to the retailer. However, if delivery charges are not separately stated, they will be included in the sales or selling price and will be subject to sales tax. This means in order to take advantage of this benefit, you need to clearly separate the delivery charges from the sales price on your invoices moving forward.

If you have any questions about this notice, please contact the Taxpayer Assistance Center at 785-368-8222 or visit www.ksrevenue.gov.


Disclaimer: Our attorney wanted you to know that no financial, tax, legal advice or opinion is given through this post. All information provided is general in nature and may not apply to your specific situation and is intended for informational and educational purposes only. Information is provided “as is” and without warranty.

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