Shipping and handling¶
Shipping is taxed in some states and not others, and several distinguish postage from handling. The extension reports your shipping charge to TaxCloud as its own line, with its own TIC, so those rules can be applied.
The setting¶
Stores → Configuration → Sales → Tax → TaxCloud Settings → Shipping TIC
| TIC | Use it when |
|---|---|
11010 |
You charge postage only — you pass through what the carrier charges |
11000 |
You charge shipping and handling — your charge includes packing, materials, labour |
The default is 11010.
Which one describes your store¶
Ask what your shipping charge actually is.
If you use live carrier rates — the customer pays what UPS or USPS quotes —
that is postage, 11010.
If you charge a flat rate, a per-item fee, or anything with a margin in it, that
almost certainly includes handling, 11000. A "free shipping over $50" offer
where you absorb the cost does not change this: what matters is what the charge
represents when there is one.
The distinction is not cosmetic
A number of states tax handling but exempt separately stated postage. Declaring handling as postage under-collects in those states; declaring postage as handling over-collects. If you genuinely charge both and could separate them, ask TaxCloud how they would like it reported.
How shipping appears on the order¶
The shipping charge is sent as an additional line item alongside the products, priced at what the customer pays for shipping. TaxCloud returns tax for it the same way as for any other line, and Magento shows it in the order totals as it normally would.
Discounts are accounted for. If a promotion reduces the shipping charge, the reduced amount is what is reported.
Free shipping reports nothing. With no shipping charge there is no shipping line to tax.
Refunds¶
When you refund shipping on a credit memo, the shipping line is reversed with it. If you refund only products and leave shipping with the customer, only the product lines are reversed. See Refunds and credit memos.
When several items ship together¶
Magento charges shipping once for the order, and the extension reports it as one line with one TIC. It does not attempt to split a shipping charge across a cart of mixed taxable and exempt goods.
Most stores never need more than this. If yours does — a cart where the split would make a material difference, and you have a rule for how it should be divided — that behaviour can be customised. See Extending the extension, and expect to involve a developer.