A transportation company’s charge to deliver products is not subject to sales tax. A transportation company does not own the products they are transporting. They transport products owned or sold by their customer.
A retailer’s charge for delivery and handling of taxable products is subject to the same state and municipal sales tax as the product when delivered in South Dakota. If the product is not taxable, the delivery and handling charges are not taxable.
If both taxable and nontaxable products are in the same shipment, sales tax is due on the portion of the delivery charge for the taxable products. This is determined by using a percentage of the sales price of the taxable products compared to the total sales or weight
of the taxable products compared to the total weight of all property in the shipment.
If a retailer hires a transportation company and bills the customer for the transportation service, the retailer must include the transportation charges in their taxable receipts