You asked several questions concerning sales tax on shipping charges for mail order purchases. The questions are answered individually below.

Are shipping and delivery charges on mail order purchases from a Connecticut company subject to the sales tax?

Yes. State law imposes a 6% tax on retail sales of tangible personal property and certain services provided by companies doing business in Connecticut. By law, the sale price to which the tax applies includes “any charges by the retailer to the purchaser for shipping or delivery.” Shipping charges are taxable regardless of whether they are separately stated on the customer's bill and regardless of whether the retailer itself provides the shipping or whether it is provided by a third party (CGS § 12-407 (8)(A)(iii) and (9)(A)(iii)).

Does the tax apply to shipping fees for all items or just taxable items?

The sales tax applies only to shipping charges for taxable items. By law, the shipping charge tax does not apply to shipping charges for items that are exempt from the tax.

Do any other conditions apply to the sales tax on shipping fees?

The law specifies that the tax applies to shipping charges for sales occurring on or after July 1, 1993.

A Department Revenue Services (DRS) Letter Ruling states that, in order to be taxable, the delivery charges must be charged by the retailer even if the delivery is made by a third party on the retailer's behalf. If delivery is provided by a person other than the retailer under a separate contract or agreement with the purchaser, the charges are not taxable unless the person making the delivery is specifically acting as the retailer's agent for the purpose of delivering taxable property that the retailer sold to the purchaser (Department of Revenue Services Letter Ruling 2000-7, December 11, 2000).

How much revenue does Connecticut derive from the tax on shipping charges?

DRS cannot provide any information on the amount of state revenue attributable to the tax on shipping charges. According to Michael Galliher of DRS' Research Division, the department does not require retailers to report receipts from such charges separately.

Which other states impose a sales tax on shipping fees similar to Connecticut's?

A computer search of Commerce Clearinghouse's compilation of state sales tax laws shows seven states in addition to Connecticut that impose sales tax on shipping charges. They are: Indiana, Iowa, Kansas, Kentucky, New York, North Carolina, and Oklahoma.

Of the five states in New England with state sales taxes, only Connecticut taxes separately stated shipping charges. Maine, Massachusetts, and Rhode Island exempt most shipping charges, if they are separately stated and meet certain other conditions. Vermont exempts all shipping charges. California, Idaho, Minnesota, Virginia, and the District of Columbia also exclude separately stated shipping charges from their sales taxes. (Commerce Clearinghouse Tax Research network; state tax departments)

JL:ts