Hiring the LTL carrier yourself
Pay the carrier directly for an interstate move and you are very likely paying for a transportation service, not a taxable sale of goods. Keep the carrier's own bill of lading and invoice as the record of that.
Freight & LTL
A freight carrier's bill is a different tax question than a seller's shipping line
Sales tax reaches sales of goods, and hauling a pallet is a service. That single distinction is why a trucking company's own charge for an interstate move usually sits outside the sales tax base entirely, while a seller's own line item labeled “freight” on an invoice for taxable merchandise follows a different set of rules — the same ones that already govern any other delivery charge. State agency wording below was read on 2026-08-30.
State DOR wording, quotedRead 2026-08-30Freight priced by a person
Whose bill is it
A carrier's own freight charge and a seller's freight line on a sales invoice are not the same tax question, even when both say the same word.
The carrier's own bill: hauling isn't a sale of goods
Most state sales and use tax statutes reach retail sales of tangible personal property, plus a list of named services. Trucking a pallet from one dock to another isn't a sale of property and rarely makes the named-services list, so a large share of what an LTL or truckload carrier bills you never touches the sales tax line at all — it's reached, if at all, through a separate transportation or gross-receipts tax that the carrier itself owes, not a tax the shipper pays on top of the freight charge.
Washington puts the mechanics on the page for its own trucking industry. Hauling for hire inside the state is reached through the Public Utility Tax rather than retail sales tax, split into a Motor Transportation classification and a lower Urban Transportation classification, and the state's own guide is explicit about where the line sits: “The PUT on transportation is generally computed only on those trips that originate and terminate within this state.” An interstate LTL move — freight that starts in one state and ends in another — falls outside that computation, and it never enters retail sales tax to begin with. Read from the Washington Department of Revenue's trucking industry guide on 2026-08-30.
Washington is one example of a pattern that shows up under different names in other states: a mileage-based or gross-receipts style tax on the carrier's own revenue, running instead of retail sales tax and often reaching only the miles run inside the state's own borders. The rate, the name and the exact split between interstate and intrastate treatment are set state by state, so a carrier hauling a mixed interstate lane should read its own state's transportation-tax rule rather than assume Washington's split applies elsewhere.
When a seller bills you “freight” for goods it sold you
A different question entirely: a furniture retailer, an equipment dealer or any seller moving palletized goods to a buyer, billing a line called “freight” on the same invoice as the merchandise. Here the word doesn't do any special work. Every state test we've read looks at whether the charge is for delivering property the seller sold, not at which synonym for shipping shows up on the line — “freight,” “shipping,” “delivery” and “transportation” get folded into the same category almost everywhere they're defined.
New York's bulletin on shipping and delivery charges states the underlying principle the way most states apply it once the carrier is genuinely independent of the sale: “Sales tax is not imposed on transportation services. Therefore, if a delivery service is sold independently from the sale of the taxable property being transported, the charge for the delivery service is not taxable.” The bulletin attaches two conditions to that: the customer has to arrange the transportation separately, and the delivery has to be billed on an invoice separate from the sale of the property. That's the carrier's-own-bill case again, stated from the other side — the moment freight is billed as part of the seller's own invoice for goods, it stops being an independent transportation sale and starts being tested as a delivery charge on a sale of property. Read from the New York State Department of Taxation and Finance on 2026-08-30.
The full state-by-state breakdown of that delivery-charge test — separately stated or not, optional or not, actual cost or marked up — is already covered for parcel-sized shipments on is shipping and handling taxable. The mechanics don't change for a pallet; only the size of the box does.
F.O.B. origin, F.O.B. destination, and the bill of lading
One term on the bill of lading moves the answer for a palletized sale more than any other: whether the sale is F.O.B. origin or F.O.B. destination. F.O.B. origin means title and the risk of loss pass to the buyer the moment the pallet is handed to the carrier at the seller's dock — the buyer is, in a real sense, the one hiring the transportation, even if the seller arranges and rebills it. F.O.B. destination means the seller keeps responsibility for the freight until it reaches the buyer's dock, which reads much more like the delivery charge is part of what the seller sold rather than a pass-through cost.
California's Regulation 1628 and Florida's Rule 12A-1.045 both hang their shipping-charge exemptions on that same F.O.B. line, with their own specific wording and conditions — read is shipping taxable in California and is shipping taxable in Florida for each state's full test rather than a summary of it here.
Don't confuse F.O.B. terms with freight payment terms. “Prepaid” and “collect” on a bill of lading describe who pays the carrier first, not who holds title or risk in transit — a shipment can be F.O.B. origin and still prepaid by the seller, who then rebills the buyer for the freight. Mixing the two boxes up on the bill of lading is the most common paperwork error on a palletized sale, and it's the paperwork that a state examiner reads first.
What this means for a pallet you're moving
Billing freight on your own invoice
If you're the seller adding a freight line to a sale of merchandise, that line follows the same delivery-charge tests as any other shipping charge in the buyer's state — not a separate rule because you used the word freight.
Write the bill of lading correctly
State the F.O.B. term and the prepaid or collect term separately and accurately. They answer different questions, and only one of them is what a state's shipping-charge exemption is usually testing.
Pallets and LTL freight aren't priced by the parcel calculator on this site. Send the shipment details through freight review and a person quotes the lane and its paperwork; parcel-sized boxes are faster through the calculator. Either way, this page is general information about how states have described the rule, not tax advice for a specific shipment — a state's own agency or your accountant is the source to confirm against before you file.
Where these rules come from
- Washington State Department of Revenue, Trucking industry guide — Motor transportation and urban transportation — the Public Utility Tax classification and the rule that it's computed only on trips that originate and terminate in Washington. Read 2026-08-30.
- New York State Department of Taxation and Finance, Shipping and Delivery Charges, TB-ST-838 — the rule that an independently sold transportation service is not taxable. Read 2026-08-30.
Every state writes its own sales tax and transportation tax rules, and they change without notice. Treat the wording above as what these two agencies published on the date shown, and check the rule of the state actually taxing your shipment — including California's Regulation 1628 and Florida's Rule 12A-1.045, covered on their own pages linked above.
Freight tax questions
Is freight taxable?
It depends whose bill it's on. A carrier's own charge for hauling a pallet or a truckload, especially across state lines, generally sits outside the sales tax base entirely — sales tax reaches sales of goods, and a trucking company is selling a transportation service. A seller's own “freight” line for shipping merchandise it sold you is a separate question, and it follows the same tests as any other delivery charge: whether it's stated on its own line, and whether the state taxes that line at all.
Does calling the charge “freight” instead of “shipping” change the answer?
Not on its own. No state guidance we've read carves out the word itself. What changes the answer is who is billing the charge, what's being transported, and how the invoice or bill of lading is written — not which of the several words for the same charge landed on the page.
Why is an LTL carrier's own bill usually different from a retailer's shipping charge?
Because most states tax retail sales of goods, not the sale of a transportation service. Washington is explicit about it: trucking is reached through the state's public utility tax rather than retail sales tax, and that tax “is generally computed only on those trips that originate and terminate within this state” — an interstate LTL move isn't swept in at all.
Does F.O.B. origin or destination change whether freight is taxed?
For a seller's invoice, yes. California and Florida both build their shipping-charge exemptions around exactly this line on the bill of lading, and each state's own test is worth reading in full rather than summarized here. As a rule of thumb, F.O.B. origin points toward the freight being the buyer's own transportation cost; F.O.B. destination points toward it being folded into the seller's taxable sale.
If I hire the LTL carrier directly instead of having the seller ship it, do I owe tax on the freight bill?
In most states, no. New York's bulletin on the subject puts the general principle plainly: sales tax is not imposed on transportation services, and if the delivery is sold independently of the sale of the taxable property being transported, the delivery charge itself is not taxable. Check the carrier's invoice for a use tax or excise line, which is a different charge with its own rule.