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What is the Colorado Retail Delivery Fee?
byAugust 23, 2022
Updated May 2023
As of July 1, 2022, Colorado began requiring both in state and out of state retailers to collect a new retail delivery fee. The fee applies to all deliveries made to a location in Colorado where at least one tangible personal property item is subject to sales tax. Here’s what sellers should know.
How much is the fee?
The retail delivery fee is a combination of six different fees. It is calculated per sale.
|Community Access Retail Delivery Fee
|Clean Fleet Retail Delivery Fee
|Clean Transit Retail Delivery Fee
|General Retail Delivery Fee
|Bridge and Tunnel Retail Delivery Fee
|Air Pollution Mitigation Retail Delivery Fee
|Total Retail Delivery Fee
If the entire retail sale is exempt from sales tax, the sale is also exempt from the retail delivery fee. If one item in the retail sale is exempt, but another item is subject to sales tax, the retailer should collect the retail delivery fee. For the purposes of the fee, each sale for delivery is considered a single retail delivery, even if multiple deliveries are required.
When and how do I report and remit the fee to the state of Colorado?
The seller or marketplace facilitator that collects the fee from the consumer is responsible for remitting that to the state. While this is called a fee and not a tax, the payment is due at the same time the seller’s sales tax return is due, regardless if sales tax is remitted monthly, quarterly, or annually. However, unlike sales tax, the fee is collected state-wide and therefore does not need to be separated by jurisdictions.
To report and pay the fee, sellers will use form DR 1786.
When the fee went into effect in July, all Colorado retailers with an active sales tax account and sales tax liability reported after January 1, 2021 were automatically registered for a retail delivery account.
I’m an out of state seller, does this apply to me?
Yes, out of state sellers are required to comply with the retail delivery fee. Sellers based outside of Colorado were also automatically registered for a retail delivery fee account.
What if I don’t make any retail deliveries that require the fee?
All retailers making sales in Colorado were automatically registered for an account. However, if you do not make any retail deliveries that require the fee, do not file any related returns and the account will be closed by the state by February 28, 2023. Do not file a zero return as your account will remain open.
Is there an exemption for small sellers?
On May 4, 2023, the governor of Colorado signed legislation that exempts existing and new small businesses from the $0.27 retail delivery fee as long as the business is new or had less than $500,000 in sales the previous year. For more information on the exemption, visit the Colorado Department of Revenue website.
For more information on the Colorado retail delivery fee, visit the Colorado Department of Revenue website.
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