Taxability of shipping charges

Because we treat freight/shipping just like any other line item on the document, you can associate a tax code to your freight/shipping line item. The taxability of freight/shipping varies from jurisdiction to jurisdiction. Depending on how you ship your goods, via USPS, FedEx, or UPS, you can have different taxability than if you ship via your own company truck. Avalara offers various different freight tax codes to choose from. Make sure that you select a code that's representative of how you ship your goods. Look at our tax code lookup utility to view a list of specific freight tax codes.

Tip You can include multiple freight lines on a transaction that include different addresses. For example, you might ship one item to CA and another to NY. AvaTax will look for a freight line in the transaction, and based on the address of that line, will group those items together. If a freight line item has shipped to CA, AvaTax will bundle line items with the same CA address and use that information for determination. More information about how AvaTax handles freight lines shipping to specific addresses is available in the Change freight and handling taxability Knowledge Center topic.