Who will be most impacted by the new retail delivery fee Colorado has begun collecting, and how can businesses adjust? Although the retail delivery fee is based in Colorado, businesses in other states that sell taxable goods to Colorado customers will also feel the effects.
Key Takeaways:
- The retail delivery fee amounts to $0.27 per sale, which will be paid by the customer
- While the fee directly impacts customers, retailers are responsible for collecting and remitting the fee
- Affected businesses will need to register for a Retail Delivery Fee account on the Colorado Revenue Online system
New Colorado Retail Delivery Fee
As of July 1, 2022, Colorado is now collecting a retail delivery fee of $0.27 per sale. This new retail delivery fee applies to retail sales of taxable goods that are delivered by motor vehicle to a Colorado customer.
Who Needs to Pay This New Fee?
The new retail delivery fee is ultimately paid by Colorado customers purchasing taxable goods and having them delivered anywhere in the state. Although the customer will pay the fee, it is the retailer’s responsibility to collect and remit the fee. Retailers who have nexus in Colorado and are currently registered to make taxable sales into the state that are delivered must register and file returns for the new retail delivery fee. If a business does not have nexus in Colorado and is not required to collect sales tax, they are also not required to collect the new fee.
Registration and Filing
In order to collect and remit the retail delivery fee, businesses need to register for a Retail Delivery Fee account on the Colorado Revenue Online system. According to the Colorado Department of Revenue website, on July 1, 2022, any retailer who had an active sales tax account, a retailer license, and any sales tax liability reported after the beginning of 2021, was automatically registered for a retail delivery fee account. After registering for an account, retailers must file a Retail Delivery Fee Return on the same frequency as they file sales tax returns. The returns are due on the same date as sales tax returns, and they can be filed and paid online through Colorado’s Revenue Online website.
Additional Requirements with the Colorado Retail Delivery Fee
Another requirement with this fee, is that retailers must separately state the fee as “retail delivery fees” on customer invoices and receipts. Luckily, the fees collected do not have to be separated by jurisdictions on the Retail Delivery Fee Return, and the fee does not apply to sales of nontaxable goods. Also, the fee only applies to each invoice or receipt once. Even if the goods are shipped separately, the fee only needs to be collected one time per invoice or receipt.
Anders State and Local Tax advisors will continue to keep a close eye on legislation to better inform and advise. For more information on this new delivery fee and how it may affect your bottom line, reach out to an Anders advisor below.
