Retailers making sales in Colorado face a new administrative challenge (in a state well-known for its administrative challenges) beginning July 1, 2022. The state will begin imposing a $0.27 fee on every retail delivery made by motor vehicle to a destination in Colorado. The fee will apply when at least one item is subject to sales or use tax and the delivery is mailed, shipped, or delivered by motor vehicle. Wholesale sales or sales of exempt goods are not subject to the retail delivery fee.
The seller is responsible for collecting and remitting the retail delivery fee even when delivery is made by a third party. In addition, the retail delivery fee must be separately stated on the customer’s invoice. The state has created a Retail Delivery Fee Return (DR 1786) that is due on the same frequency as the retailer’s Colorado sales tax return. Retailers currently registered for sales tax will automatically be enrolled in a retailer delivery fee account.
Colorado’s retail delivery fee applies to anyone making retail sales in the state without regard to whether the seller is located in-state or out-of-state. The retail delivery fee will require retailers to modify their sales systems and/or invoicing to capture the $0.27 fee when sales are delivered to Colorado customers. The state has rarely shown concern for the burdens it imposes on retailers. The retail delivery fee will only enhance the state’s reputation as a difficult place to do business.
For more information on the retail delivery fee, visit Colorado’s website here.
If you have questions on Colorado’s new retail delivery fee or other SALT matters, please contact HBK’s SALT Advisory Group at hbksalt@hbkcpa.com.
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