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Retail delivery fees no longer apply to qualified small, new businesses

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To qualify, businesses must have less than $500,000 in retail sales for prior year

LAKEWOOD, Colo. — May 9, 2023 — A new law gives qualified small and new businesses an exemption from the Retail Delivery Fee.

The Retail Delivery Fees Act (SB 23-143) 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. 

The law also allows businesses to elect to pay the fee on behalf of their customers without separately stating the fee amount on a receipt or invoice or collecting it directly from the customer.

The retail delivery fee, which was implemented in July 2022, requires businesses to collect a $0.27 fee on all retail deliveries made by motor vehicle to a location in Colorado that contained at least one item subject to state sales or use tax. The new law waives the requirement for qualifying new and small businesses.

Consumers are not eligible for a refund of any retail delivery fees collected and remitted to the department by a qualified business before the effective date of the bill.

Prior to the new law, all physical and online retailers that deliver taxable goods in Colorado were required to collect the fee and remit that amount with their regular sales tax filings. Businesses that make retail deliveries must show the total of the fees on the receipt or invoice as one item called “retail delivery fees.” 

The Colorado Department of Revenue implemented the retail delivery fee in accordance with the Sustainability of Transportation Act (SB 21-260). Additionally, the retail delivery fee for businesses that don’t qualify for the exemption will increase to $0.28 on July 1 as a result of the inflation adjustment required by the Sustainability of Transportation Act.

For more information, please visit tax.colorado.gov/retail-delivery-fee.