Adding an Retail Delivery Fee - New Legislation in Colorado

Here’s their reply to me:

Hey Justin,

Abby here from Shopify Support - hope this email finds you well! It is a pleasure to assist you today!

Thank you for reaching out and sharing the details of your tax inquiry. I have spoken to our escalated Taxes team regarding the upcoming Colorado Retail Delivery Fee, and they have advised that we do not have the ability to determine the type of vehicle that is being used for delivery, so currently we won’t be able to automatically charge this on orders. And rest assured Shopify will be supporting this and implementing a solution expected by July 1st.

One recommendation I have is to include “RDF included” in the specific Colorado shipping rate and ensure the shipping rate is only for Colorado.

You can look into another way to include this new fee on your Colorado orders. For example, you can add it to your shipping fee, handling fee, or set up Colorado-specific shipping rates, as mentioned above. Sometimes merchants create separate products for their shipping surcharges that then become a separate line item, such as with shipping insurance products.

There are also third-party apps that facilitate custom surcharges, such as Order Surcharge & Product Fees by Mageworx, from our Shopify App Store.

That being said, our Tax team updates our Tax tables on a monthly basis, so if this new tax rate would be something that is required to update on our end, then we would do the update.

Since this new tax rate will only be taking effect from July, there is time for our Tax Team to look at whether this will need to be updated on our Tax system or not. Our system covers State, County and City taxes and if this is something that would be added into one of the rate types then we would be updating our system.

Overall, because this is a taxation question, I would recommend reaching out to your local tax professional to confirm what exactly this RDF will need to look like on invoices and receipts, and our team can then advise accordingly for the best implementation.

You may want to ask them something like:

  • Is it enough to incorporate the RDF into the shipping fee, and add an additional line of text to the order invoice stating that $0.27 of the shipping fee is meant to cover the RDF…
  • or else, does the RDF have to be a separate line item entirely, and cannot under any circumstances be incorporated into the price of another line item?

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Please remember that Shopify is always here for you and your business to grow successfully.