How Illinois Handles Tax on Shipping

In Illinois, shipping charges may be exempt if they’re separately stated and not part of the selling price of taxable goods.

General Rule

Exempt: Delivery charges are not taxable if separately stated and optional.

Taxable: If shipping is included in the selling price or required, it is taxable.

Handling Charges

Handling and combined “shipping & handling” charges are always taxable.

Best Practices for Compliance

• Clearly itemize shipping on invoices.
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• Avoid bundling shipping and handling into one fee.
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Example

1. Customer buys taxable electronics for $500 with $25 separately stated “Delivery” → $25 is exempt.
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2. Same sale with $25 “Shipping & Handling” → $25 is taxable.
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Stay Compliant with Kintsugi

Illinois distinguishes between optional vs. required delivery. Kintsugi Intelligence ensures you apply tax correctly, regardless of invoice structure.

⚖️ Important Notice: Sales tax regulations are subject to change without prior notice. For guidance tailored to your business, please consult a qualified tax advisor.