In Technical Advice Memorandum 200314028, the Internal Revenue Service (IRS) has held that transportation and delivery charges included in the dealer's sale price for a semitrailer, shipped directly from manufacturer to customer, are taxable. They are taxable to the extent that those charges did not exceed charges that would have been incurred to ship the semitrailer from the manufacturer to the dealer.
Regulation Section 145.4052-1(d)(1) provides an exclusion for transportation and delivery charges for transporting a vehicle from a dealer to a customer. However, delivery charges incurred when a trailer is shipped from a manufacturer to a dealer are includable in the taxable sale price of the trailer. The dealer may not exclude the entire delivery charge from the taxable sale price of the trailer by removing itself from the distribution chain.
In a separate issue discussed in this memo, the IRS has held that lights and dock bumpers installed on the semitrailers are taxable. This is because they contribute to the highway transportation function of a taxable body or chassis of a vehicle subject to tax when sold on or in connection with the sale of the body or chassis, the agency says.