Colorado has implemented a new “retail delivery fee,” which is a tax of $0.27 per delivery of a taxable product. The fee, effective July 1, 2022, will be imposed on the buyer but will require retail sellers and marketplace facilitators to collect and remit the tax by filing a separate return.
The retail delivery fee will be imposed on all deliveries by motor vehicle to a location in Colorado with at least one item of tangible personal property that is subject to state sales or use tax. A delivery occurs when taxable goods are mailed, shipped, or otherwise delivered by motor vehicle to a purchaser in the state.
Multiple Sales and Deliveries
The retail delivery fee is based on each sale for delivery to a customer regardless of the number of physical deliveries it takes to complete a sale. For example, if a customer purchases a number of items at the same time, only one retail delivery fee is due even if it takes multiple deliveries to complete the sale. If a customer orders a number of items and completes the purchase of each item at different times, the retail delivery fee is due on each sale even if all of the sales are completed in one delivery.
A delivery is exempt from the retail delivery fee only if every item in the sale is exempt from sales tax. The retail delivery fee is due if at least one item in the sale is subject to sales tax. Similarly, while wholesale sales are not subject to the fee, the seller must collect the retail delivery fee if a delivery includes an item that is subject to state sales or use tax.
Third-Party Delivery Services
The retail delivery fee will apply to deliveries made by third parties regardless of who owns and operates the motor vehicle used in the delivery. The retailer that collects and remits sales or use tax is required to collect and remit the retail delivery fee for the third-party delivery.