5/4/23 Update: Colorado Retail Delivery Fee

* 5/4/23 Update *

originally published June 14, 2023

Colorado has made adjustments to their retail delivery fee legislation in an effort to help lessen the impact on small sellers. If your taxable sales in Colorado are less than $500k in the calendar year 2022, then you no longer have to collect the Colorado retail delivery fee. In addition, you are now allowed to pay this on behalf of your purchaser but it must be unlisted in your purchaser's receipt and included in your sale price. More details at… https://tax.colorado.gov/retail-delivery-fee

Effective July 1, 2022, Colorado imposes a retail delivery fee on all deliveries by motor vehicle to a location in Colorado with at least one item of tangible personal property subject to state sales or use tax. 

Reminder: Effective July 1, 2023, the Colorado Retail Delivery Fee (Colorado RDF) will increase from $0.27 to $0.28. 

Please read below and follow the link to the Colorado website to learn more.

We suggest keeping things simple and adding a line item to all invoices with deliveries to Colorado. The line item should read “retail delivery fees $.27”. In addition, there is a separate return that needs to be filed for this. If you wish to be compliant, we can file this return on your behalf. Contact us here.

If you do not currently have a requirement to collect and remit tax in Colorado many clients are choosing to ignore this. However, if you do have a requirement to file in Colorado we suggest complying with this new requirement. 

Per Colorado: “The retailer or marketplace facilitator that collects the sales or use tax on the tangible personal property sold and delivered, including delivery by a third party, is liable to collect and remit the retail delivery fee. Deliveries include when any taxable goods are mailed, shipped, or otherwise delivered by motor vehicle to a purchaser in Colorado.

The retail delivery fee is due at the same time as your sales tax return. Returns are generally filed on a monthly basis and must be filed on or before the 20th day of the month following each reporting period. Retailers permitted to file state sales tax returns on a quarterly, annual, or other basis will file the retail delivery fee return on the same schedule.

The retail delivery fee will be reported and paid on a new return, the DR 1786 form. The retail delivery fee is collected state-wide, does not need to be separated by jurisdiction, and is calculated per sale. The retail delivery fee is made up of six different fees.”

The rates are listed via the link below along with more of what Colorado has stated.  https://tax.colorado.gov/retail-delivery-fee