In Arkansas, shipping charges can be taxable depending on how they are billed. If you charge for delivery as part of the sale of a taxable product, you generally need to collect sales tax on that amount.
General Rule
Taxable: Shipping (delivery, freight, postage) is taxable when it’s tied to the sale of taxable goods.
Exempt: If shipping is separately stated by a 3rd party carrier and the items shipped are exempt (like certain groceries or medicines), then the shipping charge is also exempt.
Handling Charges
Regarding handling charges, fees for handling, packing, or "shipping & handling" when bundled together are always considered taxable, even if shipping alone might otherwise be exempt.
Best Practices for Compliance
List shipping separately on invoices if you want to avoid unnecessary tax when items are exempt.
Don’t bundle shipping with handling—this makes the full charge taxable.
Double-check exemptions if you sell both taxable and non-taxable items in the same order.
Example
If you sell a taxable product (like furniture) and charge $25 for delivery → both the item and shipping charge are taxable.
If you sell an exempt product (like a prescription drug) and charge $25 for delivery (separately stated) → neither the item nor the shipping charge is taxable.
Stay Compliant with Kintsugi
Arkansas sales tax rules can be tricky, especially if you sell a mix of taxable and exempt products. Kintsugi Intelligence automatically applies the right treatment to shipping charges so you don’t have to guess.
⚖️ Important Notice: Sales tax regulations are subject to change without prior notice. For guidance tailored to your business, please consult a qualified tax advisor.