Delivery Charges

Divide the amount charged for the taxable goods by the amount charged for all of the goods being shipped, then multiply the resulting number by the total delivery charge. 

A delivery worth $400 contains $300 of taxable goods and $100 of nontaxable goods. The delivery charge is $30. To determine the taxable percentage of the delivery charge, divide $300 by $400, which is 75%. 75% of the delivery charge is taxable.

Divide the weight of the taxable goods by the total weight of the shipment, then multiply the resulting number by the total delivery charge. 

The invoice states the delivery consists of 3 pounds of taxable goods and 9 pounds of nontaxable goods. Divide 3 pounds by 12 pounds, which is 25%. 25% of the shipping charge is taxable. Using method #2 is optional; the seller may use method #1 even if weights are listed on the invoice. 

Third party hauler means the hauler must be hired by the purchaser of the aggregate or concrete block to pick up the items from the seller and deliver them to a location designated by the purchaser. 

Charges for delivery of aggregate by third party haulers are exempt if the aggregate will be used in road construction. 

The exemption for delivery charges for aggregate material used in road construction does not apply to charges for delivery of aggregate by the seller or to charges for delivery of concrete block. 

Road construction includes the establishment, improvement, and maintenance of roads together with all bridges or other structures thereon which form part of the road. This includes construction of public roads, cartways, and private roads in townships located outside of the seven-county metropolitan area up to the point of the emergency response location sign. A cartway is a strip of land two rods wide that provides access to a property owner over land owned by someone else or to a public road. 

Charges for the delivery of aggregate by third party haulers for uses other than road construction are taxable even if the hauler is required to spread and level the aggregate material for the purchaser.

The delivery charge for aggregate material and concrete block is exempt as long as the purchaser provides a completed Form ST3, Certificate of Exemption, indicating one of the following: 

• The product being delivered is exempt for use in industrial production 
• The product being delivered is exempt because it will be resold at retail 
• The sale is to an exempt entity 
• The sale is aggregate material delivered by a third party hauler to be used in road construction 

Charges to deliver aggregate material and concrete block outside of Minnesota are not taxable.