California's default leans the other way from most states that tax shipping outright: the California Department of Tax and Fee Administration exempts a delivery charge, but only when it is billed by an outside carrier, broken out as its own invoice line, and priced at no more than what delivery actually cost the seller. Miss any one of the three and the charge is taxed along with the merchandise. Read from CDTFA Publication 100 and Regulation 1628 on 2026-08-28.
Common carrier, its own line, priced at cost. Any one missing and California taxes the shipping charge with the sale.
Publication 100 requires the goods to ship directly to the purchaser by common carrier, contract carrier, or US Mail. Regulation 1628 sharpens this: the exclusion applies only when transportation is by other than facilities of the retailer, so a seller's own delivery van does not qualify.
The charge has to be stated on its own, not folded into the price of the goods. Regulation 1628 adds a wrinkle here: a line called handling does not count as a statement of transportation charges, even when it covers the same cost.
The charge cannot exceed what delivery actually cost the seller. Anything billed above that cost is taxable on the excess, and Publication 100 states plainly that a seller with no records showing the actual cost loses the exemption entirely.
All three run together. A seller who ships by common carrier and states the charge separately but marks it up loses the exemption on the marked-up portion only; a seller who cannot document the actual cost at all loses it on the whole charge, because there is nothing left to compare against.
Publication 100 is CDTFA's plain-language guide; Regulation 1628 is the underlying rule with the legal wording. Reading both closes gaps neither one covers alone.
| Source | What it says | What it means for a seller |
|---|---|---|
| Publication 100, exemption | Not taxable when the seller ships directly to the purchaser by common carrier, contract carrier, or US Mail; the invoice separately states delivery, shipping, freight or postage; and the charge is not greater than the actual cost for delivery to the customer. | All three conditions apply together; none alone is enough. |
| Publication 100, markup | When the delivery charge is greater than the actual delivery cost, the portion of the delivery charge that is greater than the actual delivery cost is taxable. | A padded shipping line is only partly exposed, not fully taxed. |
| Regulation 1628(a), independent carrier | Tax does not apply to separately stated charges for transportation of property from the retailer's place of business, provided the transportation is by other than facilities of the retailer, and the charge does not exceed the cost of the transportation to the retailer. | Company-owned delivery vehicles fall outside the exclusion. |
| Regulation 1628, separate statement | Transportation charges will be regarded as separately stated only if they are separately set forth in the contract for sale or in a document reflecting that contract. | A combined price with shipping folded in never qualifies, regardless of intent. |
| Regulation 1628, handling | A separately stated charge designated handling or handling charge is not a separate statement of transportation charges. Tax applies to such charges. | Renaming the line to handling defeats the exemption on that portion. |
Regulation 1628 also pulls in a charge for freight-in — transportation of property to, rather than from, the retailer's place of business — as part of the taxable measure, which is a different question from shipping a finished sale out to a customer and worth keeping separate when reading an invoice.
Ship with a carrier the retailer does not own, put the charge on its own line labeled shipping or delivery rather than handling, and keep the paperwork — freight invoices, express receipts, bills of lading — that shows what delivery actually cost. That combination is what Publication 100 and Regulation 1628 both point to as the exempt path for an ordinary parcel sale.
None of this changes what the shipment itself costs to move, only whether California adds tax on top of that figure. The calculator on this site prices the box being sent, so the number that lands on the invoice's shipping line is a real quote rather than a guess.
It depends on how the sale is delivered and billed. CDTFA Publication 100 exempts a delivery charge only when all three hold at once: the goods ship directly to the buyer by common carrier, contract carrier or US Mail; the charge is stated on its own line on the invoice; and the charge is no more than the seller's actual cost of that delivery.
Only the excess is taxed. Publication 100 states that when a delivery charge is greater than the actual delivery cost, the portion of the delivery charge that is greater than the actual delivery cost is taxable, and the rest is treated the same as an exempt charge.
Yes. Regulation 1628 excludes transportation charges from tax only when the transportation is by other than facilities of the retailer. A seller who delivers with company-owned vehicles rather than a common or contract carrier loses that exclusion and the charge is taxed with the sale, subject to narrower exceptions in the regulation.
It matters against the seller. Regulation 1628 states a separately stated charge designated handling or handling charge is not a separate statement of transportation charges, and tax applies to such charges even when a shipping charge on the same invoice would have qualified.
The whole charge becomes taxable. Publication 100 is explicit that a seller without documentation showing the actual cost of delivery cannot claim the exemption, because there is nothing to compare the billed amount against.
This page summarizes two California tax documents as published on the date shown. It is not tax advice, and CDTFA can revise both the publication and the regulation without notice. Confirm current treatment with CDTFA directly or with someone licensed to advise on your specific filing.