Colorado Implements Retail Delivery Fee
June 28, 2022
Colorado’s new Retail Delivery Fee goes into effect July 1st 2022. This fee is a flat charge of $0.27 on all motorized deliveries in Colorado that include one or more items subject to state sales or use tax. Just as with sales taxes, the retailer collects the fee and remits it to the Department of Revenue (DOR) via a new form, DR 1786, or online through Revenue Online.
The Retail Delivery Fee is a compilation of six separate fee types, as shown below. Retailers making deliveries in Colorado are required to show the total of the fees on the receipt or invoice as a single line item called “retail delivery fees.”
|Community Access Retail Delivery Fee||$ 0.069|
|Clean Fleet Retail Delivery Fee||$ 0.053|
|Clean Transit Retail Delivery Fee||$ 0.030|
|General Retail Delivery Fee||$ 0.084|
|Bridge and Tunnel Retail Delivery Fee||$ 0.027|
|Air Pollution Mitigation Retail Delivery Fee||$ 0.007|
|Total Retail Delivery Fee||$ 0.27|
It should be noted, this is a fee for the delivery of the item(s) and not a tax on the sale. A delivery that is returned to the retailer for a full refund is NOT eligible for a refund or credit. However, each sale, regardless of the number of deliveries needed to complete the sale, is considered one individual delivery for purposes of the fee, so a single order that arrives in two or more separate deliveries will only be charged $0.27.
According to the DOR, retailers with an active sales tax account, a retailer license, and any sales tax liability reported after January 1, 2021, will automatically be registered for a retail delivery fee account. This applies to both in-state and out-of-state retailers. There is no license required or registration fee due. For new retailers, operating in the state after July 1st 2022, filing a completed Form DR 1786 will automatically register them for an account.
Fee remittances are due at the same frequency as the sales tax return (monthly, quarterly, or annually). It should be noted a completed DR 1786 must still be submitted, even if no deliveries during the reporting period were subject to the fee. Taxpayers should verify their accounting systems comply with this new requirement of collecting this fee and that the fee is stated correctly on receipts or invoices. The DOR has stated they will be generous with taxpayers on penalties and interest while taxpayers are implementing this new fee program, but the full collection and remittance of the fee is strictly required by the retailer.
More information and FAQs are available on the Retail Delivery Fee website.
Our state and local tax (SALT) professionals are available to assist if you have questions about these recent changes. Please contact our SALT Team at SALT@GMCO.com.