For specific customers
It is not unusual for automobile dealers to charge specific customers the actual freight and delivery costs for parts or other items ordered from a distributor or manufacturer. The transportation charges that cover the cost of getting the part from the supplier to the dealer are part of the dealer's cost of doing business. Any recoveries of these costs, which are passed on to the customer, are considered to be additional income from the sale of the item and subject to Retailing B&O and retail sales tax when the sale is to a consumer.
Listed separately on sales invoice
Some dealers may list the transportation charges as a separate item on the sales invoice issued to purchasers of new vehicles. This transportation charge is the cost to the dealer of having the vehicle delivered from the factory or distribution point to the dealer's place of business. If these costs are passed along to the customer, they are subject to Retailing B&O and retail sales tax when the sale is to a consumer.
After receipt of goods
Transportation or delivery costs incurred after the customer has taken receipt of the goods are not part of the selling price when the dealer is not liable to pay or has not paid the carrier. It must be clearly shown that the customer alone is responsible to pay the carrier.
Examples
1. ABC Dealer orders a new bumper at the request of a specific customer. ABC charges the customer $200 for the bumper and $20 for the transportation costs. The entire $220 is subject to Retailing B&O and retail sales taxes.
2. ABC Dealer has a fleet sales contract with a major customer which provides that new vehicles will be sold at the dealer's cost plus $800. Included in the dealer's costs is a freight equalization charge of $400. This freight charge is subject to the Retailing B&O and retail sales taxes.
References Revised Code of Washington (RCW) 82.08.010
Washington Administrative Code (WAC) 458-20-110
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