Effective July 1, Colorado has a new fee imposed on both in-state and out-of-state retailers delivering taxable tangible personal property sales by motor vehicle or common carrier into the state of CO. The fee is imposed on the purchaser, however, like sales tax, retailers are responsible for collecting and remitting it. The state is also requiring the retailer to add a separate line called “Retail Delivery Fee” to its receipts and invoices. The fee is due on each delivered sale regardless of how many shipments it takes to fill that order; however, if there are multiple sales going to the same address, each sale is subject to the fee even though the ship to address is the same for the multiple sales.
Two exceptions exist:
- A retail sale which is exempt from sales tax (such as sale for resale, wholesale, sale to a government entity or charitable organization, etc.) is not subject to the Retail Delivery Fee. However, if at least one item in the sale is taxable, the entire sale is subject to the retail delivery fee.
- Orders shipped from within CO to a place outside CO are not subject to the retail delivery fee.
The fee per sale is $0.27. The state has included a statutory clause that allows the state to increase the fee annually based on inflation.
Registration
The state will automatically register any in-state or out-of-state retailer with an active sales tax account, a retailer license, and any sales tax liability reported after January 1, 2021, for a retail delivery fee account. More than likely this will be communicated through the retailers’ online account used for remitting their sales and use tax returns.
Returns
The returns will be due the 20th of the month and the filing frequency will follow the sales tax return filing frequency of the retailers. The state has created a new return DR 1786 to report and remit the collected retail delivery fee, however, as of today it is not available. The good news is the state is not requiring the fee to be split out by jurisdiction.
Cherry Bekaert is available to assist with the practical applications of collecting and implementing these fees. Please feel free to reach out to SalesTax@cbh.com for guidance.
