A new retail delivery fee is taking effect in Colorado on July 1, 2022. Retailers will have to collect the $0.27 fee every time they deliver taxable goods to a Colorado address. This will add a layer of compliance complexity for both in-state and out-of-state retailers.
The $0.27 fee applies to retailers selling taxable tangible goods for delivery by motor vehicle to Colorado consumers, no matter who owns or operates the vehicle used to make the delivery, and whether the delivery originates in Colorado or another state. Retailers must separately state the retail delivery fee on all customer invoices and receipts. Note: the fee is levied on all qualifying deliveries, even when shipping is free.
Exceptions:
The fee doesn’t apply when otherwise taxable goods are delivered to a purchaser that is exempt from the state sales tax, such as government or charitable organization.
Likewise, the fee doesn’t apply to deliveries of nontaxable goods, including wholesale sales, so long as the property delivered is exempt from the state sales tax. If a delivery includes both taxable and exempt goods, the delivery fee will apply.
Action needed:
- Merchants subject to this fee will need to add a $0 line item to their orders with the OF400000 tax code.
- Depending upon how an integration displays tax amounts on an invoice, technology partners may need to adjust the display to state the fee amount separately from the total tax.
- Review the Colorado Department of Revenue’s webpage for more information about this fee and its display requirements. Taxpayers can also contact the CO Taxpayer Helpline for additional clarification.