In Michigan, shipping charges may be exempt if separately stated and only reflect the cost of delivery.
General Rule
Exempt: Separately stated shipping charges are exempt from sales tax.
Taxable: If delivery is included in the product price or combined with handling, it’s taxable.
Handling Charges
Handling or combined “shipping & handling” charges are always taxable.
Best Practices for Compliance
Break out delivery charges on invoices.
Avoid bundling handling with shipping to prevent taxation of the full amount.
Example
$500 taxable goods with $30 separately stated delivery → $30 is exempt.
$500 taxable goods with $30 “Shipping & Handling” → $30 is taxable.
Stay Compliant with Kintsugi
Michigan’s rules encourage clear invoice breakdowns. Kintsugi Intelligence ensures your shipping charges are properly separated to stay compliant.
⚖️ Important Notice: Sales tax regulations are subject to change without prior notice. For guidance tailored to your business, please consult a qualified tax advisor.