Effective July 1, 2022, any retailer who delivers tangible, taxable goods to a Colorado address is required to collect a $0.27 delivery fee.
The fee applies to any taxable goods shipped, mailed, or otherwise delivered by motor vehicle to a Colorado purchaser, regardless of where the delivery originated. The $0.27 is charged per delivery, no matter how many items are included.
Retailers who collect sales or use taxes on tangible personal property sold and delivered, including deliveries by third parties such as UPS, FedEx, etc., are responsible for collecting and remitting retail delivery fees. Merchants must submit their retail delivery fee at the same time as their sales tax return.
Receipts or invoices must state the retail delivery fees as one line item, separate from sales tax.
The fee does not apply for charities or government entities exempt from sales tax. Similarly, no fee applies to deliveries of nontaxable goods, including wholesale goods, as long as the property delivered is not subject to state sales tax.
The fee will apply if taxable and exempt goods are included in the same delivery.
How to Comply with the Colorado Retail Delivery Fee
The new regulation adds an additional layer of complexity for online merchants. Since the new fee applies only to taxable sales delivered in Colorado, retailers will need a way to calculate the applicable fee based on the buyer’s shipping address.
For BigCommerce merchants, our Destination Based Fee Manager by Ebizio Checkout provides the ability to assign custom fees on storefront products based on the customer’s shipping destination.
For this scenario, merchants can apply a flat fee to relevant products shipped to a Colorado address, with applicable fees automatically calculated based on the address entered at checkout.
Need help preparing your BigCommerce checkout for the new Colorado fee regulations? Contact us today.