I understand shipping... This is about the excess charged over the cost of shipping, and calling that exempt as well. I forget where I read it in their pubs and certainly don't want to go back through trying to find it. But it seemed clear to me in their wording, that they consider anything charged over the cost of shipping, as income that should have tax paid on it.
Ok, I lied. I found it...
"Are delivery and handling charges taxable?
You have the property delivered directly to your customer using a common carrier, the U.S. Mail, or an independent contractor
Tax does not apply to the delivery charges under these conditions if the charges are clearly stated as a separate entry on the invoice or other bill of sale. If the delivery charges are not stated separately, they are taxable.
You sell a refrigerator and have it delivered by an independent contract carrier. On the invoice, you show a $750 charge for the refrigerator plus a separately stated $50 charge for delivery (the amount charged you by the carrier). Since the delivery charge is stated separately, tax applies only to the charge of the refrigerator ($750). If the invoice had shown a single charge of $800, tax would apply to the entire amount.
Note: If you charge more for delivery than your actual costs, the added amount is subject to tax. In the example above, if you had charged your customer $60 for delivery, but your actual delivery cost was $50 (the amount charged by the independent contract carrier), tax would apply to the additional $10 charge.
You use your vehicle to make the delivery
Tax applies to the delivery charges if you use your own vehicle, whether or not those charges are separately stated on the invoice.
Example. You sell a refrigerator and deliver it to your customer using your own vehicle. On the invoice, you show a $750 charge for the refrigerator plus a separately stated $50 charge for delivery. Tax applies both to the delivery charge and the charge for the refrigerator.
Note: Tax does not apply to delivery charges using your own vehicle if there is a written contract of sale, signed before delivery, that transfers ownership of the property to the purchaser prior to delivery.
Handling charges. Handling charges are generally taxable.
Combined charges. If you charge a single amount for delivery and handling (for example, the invoice shows a single amount for "postage and handling" or "shipping and handling"), the portion of the charge that represents handling is generally taxable, while the portion that represents delivery may or may not be taxable."