Tax exemption question (USA)

Graham

Can I claim tax exemption on shipping supplies?

I haven't been, but it occurs to me that as I charge for them, here it's in the shipping charge elsewhere it's an added fee. Then that is resale.

Thoughts anyone?

Calibrick

Hmmm I never considered this aspect... I certainly take a tax credit on shipping supplies as a business expense, but I also don't explicitly charge for them either. That sounds like a good Google topic! :-)

I suspect it may not matter that you charge for them... for example, you charge for LEGO but you also deduct (expense) your Cost of Goods Sold for those. But I am not a tax expert, to be clear! Common sense isn't always the rule in our tax code. ;-)

Good luck, let us know what you find out - I'm curious now!

Graham

Hi @Calibrick searching ends up in a murky grey area.more like a quagmire!

The answer seems to vary by state and how the charge for shipping materials is applied, here it's "included" in post costs. Over there it's a separate fee. Also shipping is/is not optional.

It's not covered in Tennessee explanation of tax exempt purchases, curious to see if anyone IS claiming exemption on shipping supplies, assuming they are also charging the customer for them.

My argument would be that I am selling the customer shipping supplies, therefore it's re-sale of goods and should be exempt?

leopard37

I think that argument is thin as it is a cost of doing business to have an envelope to send the goods in. But I'm in Canada so who knows? Here you can put the cost of the shipping goods against your profit as a liability and any expense of the business the tax paid can counter the tax you owe. Not sure about the States.

Graham

Guess its time to visit the county offices!