Colorado Retail Delivery Fee

[Jacqui]

Recently you may have received a notice from the State of Colorado informing you of your requirement to collect a new Retail Delivery Fee, effective 9am EST July 1, 2022. If you are a merchant currently collecting sales tax in Colorado, the retail delivery fee will be automatically collected on taxable sales delivered to customers located in Colorado beginning July 1st, 2022.

Below is an overview of some questions you may have regarding this new tax:

How much is this tax?

This tax will be $0.27 on most deliveries made by motor vehicle. 

When is the tax applied? 

Starting July 1st, the fee is required when the delivery includes at least one tangible item subject to state or sales use tax that is delivered to the customer.

Do I need to do anything? 

No. No action is required within your Shopify admin to collect the new fee, but you are responsible for reporting and paying the fee at the same time as your Colorado sales tax return.

How will this fee appear for my customers?

The fee will be included in the taxes on the order. Currently, it will not show as its own line item.

How will this fee be shown in my reports?

The fee will be listed as a tax line item on the order details and on your sales tax report as “Retail Delivery Fee”. 

Will this apply more than once if one order has multiple shipments? 

No. Each order for delivery is considered a single “retail delivery” regardless of how many shipments are needed to deliver the items purchased.

What if no items are considered taxable?

This fee would not apply. 

What if there is a mixture of taxable and nontaxable items?

The fee would be applied. The fee is only applied once even if there are multiple taxable items.

What about digital products (ex. Digital downloads)?

This fee would not apply.

Does the fee vary by jurisdiction in Colorado?

No. The retail delivery fee is collected state-wide. 

Does the fee apply if I’m located in Colorado and ship out of state?

No, this fee is only for orders shipped to Colorado addresses. 

Is the fee refundable if the item(s) are returned?

The Colorado Dept. of Revenue has ruled the fee is non-refundable, even if the item is returned. 

Is the tax still applied if shipping is free?

Yes. The fee will be added to the taxes applied to the order. 

Who do I contact if I have questions?

For questions specific to your business, we recommend that you speak to your tax professional or contact the Colorado Department of Revenue Taxpayer Helpline at 1-303-238-8737. 
 

Where can I learn more about this tax?

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.