Set the Shipping/Handling Cost on a Sales Order as Taxable

To make a shipping/handling cost taxable, set it in the shipping item setup.

1. Navigate to Lists > Accounting > Shipping Items.

2. In the Ship Items list, click on Edit next to the Shipping Item that needs to be set as taxable.

3. Navigate to the Shipping Rules tab.

If user needs to have Charge Handling Separate from Shipping preference enabled, then Shipping and Handling Rules tab will be available.

4. Check the Charge Tax on this shipping portion of item box.

If user needs to have the Charge Handling Separate from Shipping preference enabled, then another checkbox called Charge Tax on this handling portion of item will be visible.

If Advanced Taxes is enabled, instead of a checkbox, Charge Tax on this shipping/handling portion of item will be a dropdown list. Select a tax schedule to calculate the tax.