How can I apply the new Colorado Retail Delivery Fee to orders?

[SkyGOAT]

Starting in July, retailers will be required to charge, collect, and remit a new fee to the Colorado Department of Revenue (CDOR).  How can I add this fee to CO orders in Shopify?

Retail Delivery Fee (RDF)

Do you sell taxable items that will be delivered by a motor vehicle to a location in Colorado

(including deliveries made by a third-party)?

If the answer is yes, this impacts you!

You will be required to charge, collect, and remit a new fee to the Colorado Department of Revenue (CDOR).

Highlights

• Begins July 1, 2022
• Applies to all retail sales delivered by a motor vehicle to a location in Colorado
• Includes third-party deliveries
• $0.27 per retail sale for delivery
• Charged to the purchaser
• Collected by the retailer and remitted to CDOR
• Follows sales tax filing frequencies and due dates
• Filed on a separate return, form DR 1786

Transactions subject to the Retail Delivery Fee (RDF)

• All retail sales that:
• Have at least one item delivered by motor vehicle; and
• Include at least one item that is subject to Colorado state sales tax

Action items: What you need to do

• Charge purchaser on delivery orders - RDF must be listed separately on the receipt or invoice and labeled as "Retail Delivery Fee"
• File RDF return and remit fees to CDOR

[ellimac20]

Thanks for posting this! I just saw this notice from Colorado. Do you know how Shopify will implement this fee? I wonder if they will put the responsibility on the merchant even though they restrict the cart customization?

[amgeiman]

Thank you for initiating this thread! Hoping we can stay informed with updates regarding the Colorado RDF and ways to automate via our cart starting July 1. I started chatting with our CPA regarding this filing and we will be curious to see if the number of orders needs to be stated in this filing OR if we are just reporting/remitting the total in delivery fees collected. Much to learn!

Here is an article about the RDF via Avalara:

https://www.avalara.com/blog/en/north-america/2022/05/colorados-new-retail-delivery-fee-takes-effect...

[Chris_Vestal]

I did a search for  Retail Delivery Fee (RDF) and this came up in the search. Thanks for initiating and this will get better result than the 45 min support chat I just had with Shopify.  The suggestions we received to charge the .$.27 will not comply with the state ruled highlighted in red on the 1st post. 

Hope Shopify will have a solution soon!!!

[kd312]

Thanks for getting this rolling!  CO gave us one month to implement this?  Shopify, please update us on how we'll be able to add this separate line item to each purchase shipped to a CO address!  Thank you!

[BetterVent]

Ok. June is here. Does anyone know what is happening with this yet? I haven't had a sale in colorado so I don't know if Shopify has found a resolution or not. And, as we all know it is virtually impossible to speak with a Shopify rep. 

[Denis_B]

It is June 13th - any update?

[Chris_Vestal]

Not one single post here from a Shopify rep...   Anyone make a support ticket yet? Anyone know if they are aware of this issue at all?

[kd312]

Yes, they’re aware. I’ve contacted them. Copy/pasted part of their reply either in this thread or the other one. Basically, unless it is a “tax” that they are required to address, they aren’t concerned.

[BetterVent]

Shopify will not involve themselves in this. I spoke with Colorado Department of Revenue and their response was to just file the form beginning in July (for June reporting) and pay the tax out of our own pockets until a resolution can be found. It appears that a solution is not forthcoming via Shopify so we will most likely be paying this tax ourselves for the foreseeable future. 

[Chris_Vestal]

the concern is not filing and paying... it is following the new rule where we need to have the new fee as a separate line item. 

If a Colorado customer calls, we can manually add a custom product line item to a custom order. Until then we will all have to eat the fee!?
Unless someone here gets more creative than us.
Bury it in a shipping and handeling? Again, we will not be following the rules of the new fee if it is not a separate line item.

[BetterVent]

Well, even if we can't get this line item built into our site we are still expected to give them the money monthly beginning in July. I have not yet seen the form but I expect it is pretty simple at remitting 27 cents, out of pocket, per order, to the State of Colorado. Apparently they do not care if we can actually charge it to the customer. It seems this was added in a hurry and not well thought out by the State Legislators. I would also expect that other states will be following suit soon. This money is going into the state highways funds to cover the loss of revenue due to the increase in use of EVs. 

[kd312]

Does the CODOR response make sense to you? I thought we were to start collecting on July 1, first filing due in August 20.

[Chris_Vestal]

Makes 100% sense to me. 
THIS is the issue with our Shopify stores not currently supporting:

Fee must be separately stated

Retailers must separately state the retail delivery fee on all customer invoices and receipts.

[BetterVent]

I was told by the rep at CDOR that the seller is required to pay the 27 cents per sale in the state. It appears that they are aware of the issues we are facing and figure it will eventually work itself out but that does not absolve us of sending them the money beginning in July.

[BetterVent]

Sorry, my bad. You are correct. July.

[Teaforme]

It looks like Shopify has this in the works.
"We expect to roll it out July 1st. The tax development team is creating a rule that applies a ‘0% + $0.27’ tax to the shipping line on applicable orders. There will also be a comment on the invoice that $0.27 is the retail delivery fee."
I bet they'll make an announcement soon.

[grifffried]

can you share where you found this information?

[Chris_Vestal]

we received letters from the CO Department of Revenue. If you are registered with the CODOR, you would have received notice. 

https://tax.colorado.gov/retail-delivery-fee

[grifffried]

Thanks, Chris but should have been more specific. Replying to @Teaforme's post about Shopify having an update by July 1st.

[Teaforme]

Online support chat.

[StacyZ]

How about orders free of shipping fee and without shipping line?

[BetterVent]

This fee still needs to be charged on all orders going into Colorado by motor vehicle. 

[Chris_Vestal]

So, we are all in the same boat still. State of Colorado is going to be chasing us down soon. 
Hey Shopify!!! FIX THIS!!! WE are now after the deadline with CDOR! 

[BetterVent]

You can still file and pay what you owe (.27 per customer order shipped). You just aren't able to charge the customer at this point. Colorado understands that we are having problems with getting this done on our invoices. They just want their money. Fortunately, I only had 2 sales in June.

[Chris_Vestal]

guess you are lucky you only have a few sales. 

Shopify is not giving us the ability to comply. This is not just us who have a CO address, it is anyone selling to a CO address. 

[Chris_Vestal]

reply from Shopify support chat just now. 


"Colorado have acknowledged that some businesses may not be able to separately identify the tax, and have amended some of their FAQs on the regulation in light of that. See FAQ 6 and 8 of the Colorado Department of Revenue article."

I would recommend consulting a Shopify Expert to help you customize the notification. Hiring an Expert gets you professional help with launching, designing, tweaking, and marketing your store. To find an Expert, you may submit a job request from your Shopify admin. After you enter a brief description of what you need, you are matched with Shopify Experts who have experience related to your project. You may click this Shopify Experts link

[BetterVent]

I am not located in Colorado but have been filing sales tax there since before they changed their reporting requirements at the end of 2019. They are quite easy to work with and very forgiving. There are new FAQs that address this here: https://tax.colorado.gov/retail-delivery-fee
Retail Delivery Fee | Department of Revenue - Taxation<>
Yes, the retailer must list the fee as a separate item called “retail delivery fees” on the receipt or invoice issued to the purchaser. However, the Department currently has no plans to prioritize enforcement of this provision as long as retailers are paying the full amount of the fees due in accordance with their liability under section 43-4-605(6)(c), C.R.S. Retailers who are temporarily ...
tax.colorado.gov
Questions 6, 7 and 8 are relevant to this topic.

[Trevor]

Hello!

Thank you for starting a chat about the new Colorado Retail Delivery Fee. You can find more information on the Fee and how this will be implemented in your Shopify store by viewing our Community post.

To learn more about the Colorado Retail Delivery Fee, visit the Colorado Department of Revenue website. 

You can also review our help center article if you have questions related to how this impacts your store. 

It would be best to contact Shopify Support if you have any questions related to your account. 

Thank you!