Retail Delivery Fee

Effective July 1, 2022, Colorado imposes a retail delivery fee on all deliveries by motor vehicle to a location in Colorado with at least one item of tangible personal property subject to state sales or use tax.

The retailer or marketplace facilitator that collects the sales or use tax on the tangible personal property sold and delivered, including delivery by a third party, is liable to collect and remit the retail delivery fee. Deliveries include when any taxable goods are mailed, shipped, or otherwise delivered by motor vehicle to a purchaser in Colorado.

The retail delivery fee is due at the same time as your sales tax return. Returns are generally filed on a monthly basis and must be filed on or before the 20th day of the month following each reporting period. Retailers permitted to file state sales tax returns on a quarterly, annual, or other basis will file the retail delivery fee return on the same schedule.

The retail delivery fee will be reported and paid on a new return, form DR 1786. The retail delivery fee is collected state-wide, does not need to be separated by jurisdiction, and is calculated per sale. The retail delivery fee is made up of six different fees. The rates are listed below.

 

Fee Type Rate July 2022 to June 2023
Community Access Retail Delivery Fee  $ 0.0690
Clean Fleet Retail Delivery Fee  $ 0.0530
Clean Transit Retail Delivery Fee  $ 0.0300
General Retail Delivery Fee  $ 0.0840
Bridge and Tunnel Retail Delivery Fee  $ 0.0270
Air Pollution Mitigation Retail Delivery Fee  $ 0.0070
Total Retail Delivery Fee  $ 0.27

 

Retailers that make retail deliveries must show the total of the fees on the receipt or invoice as one item called “retail delivery fees”.

If every item in a retail sale is exempt from sales tax, the delivery is also exempt from the retail delivery fee. However, if one or more items in the transaction is subject to sales tax, the retail delivery fee is due. Each sale for delivery is considered a single “retail delivery” regardless of how many shipments are needed to deliver the items purchased.

Account Registration

As a courtesy, on July 1, 2022, retailers with an active sales tax account, a retailer license, and any sales tax liability reported after January 1, 2021, were automatically registered for a retail delivery fee account. Open out-of-state retailers or retailers' use account holders were also automatically registered. There is no license required or registration fee due.

Retailers cannot opt-out of the automatic registration. If you do not make retail deliveries that require the filing of the Retail Delivery Fee Return (DR 1786) do not file any returns, and the account will be automatically closed by February 28th, 2023. If you file any Retail Delivery Fee Returns (DR1786), including returns with zero activity, we will assume you may make retail deliveries in the future and will not automatically close your account. No additional action is needed on the accounts closed. 

However, you may receive letters from the Department regarding the retail delivery fee that suggest you file a return if you are required to collect and remit the retail delivery fees. If you do not wish to receive letters regarding the retail delivery fee, you may close the account at any time: 

  • through Revenue Online; 
  • by submitting form DR 1108; 
  • or by contacting the Taxpayer Helpline at 303-238-7378.

Additional Ways to Create an Account

Existing Accounts

  • Can Use Revenue Online
    • Go to Revenue Online and log in.
    • Go to the “More” tab.
    • Then in the “Additional Actions” panel, click on the “Add Retail Delivery Fee Account” link.
  • File Using the PDF form, DR 1786
    • Completing and filing the Retail Delivery Fee Return using form DR 1786 will register a Retail Delivery Fee account for you.

New Accounts 

  • You can add the Retail Delivery Fee account type by submitting form CR 0100. In section C, 3 select “Yes” for the “Do you sell taxable items that will be delivered by a motor vehicle (including deliveries made by a third-party)?” question. 

Adding Access to an Existing Username

For information on how to add access to your retail delivery fee account to an existing login, see our Account & Access Management FAQ page.

Reporting & Payment

Retailers who are required to collect the retail delivery fee will file the Retail Delivery Fee Return, form DR 1786, and pay the fee to the Colorado Department of Revenue. 

  • Only one return is required for all locations (sites) on your account.
  • If you do not make retail deliveries, DO NOT file a return and the retail delivery fee account will automatically close by February 28, 2023. You will not be required to file any retail delivery fee returns. 
  • If you do make retail deliveries, you are required to file a return every period starting July 2022, even if no fee is due for the reporting period, until your retail delivery fee account is closed.
  • Filing and payment can be submitted through multiple channels:

For additional information on payment options, see our Tax Payments web page. The EFT Payment - ACH Debit payment method will not be available until early 2023, but all other payment methods will be available for your first filing.
 

Frequently Asked Questions

The retail delivery fee is due on all items that are subject to Colorado state sales or use tax and are delivered by motor vehicle to a location within Colorado. If you sell taxable items for delivery, you need a retail delivery fee account to pay the retail delivery fee. The retail delivery fee is a separate account, so you will need to have both account types in this scenario.

No, the retail delivery fee applies only to retail sales of tangible personal property for delivery by a motor vehicle to a purchaser at a location in Colorado.  However, the retail delivery fee does apply to deliveries by motor vehicle from another state to a location in Colorado.

No, wholesale sales are not subject to the retail delivery fee. If delivery by motor vehicle to a location in Colorado includes both items for resale (wholesale sales) and goods subject to state sales or use tax, then the seller must collect the retail delivery fee.

The retail delivery fee is imposed upon the purchaser. However, the retailer who sold the tangible personal property for delivery by a motor vehicle is required to collect the fee from the purchaser and remit it to the Colorado Department of Revenue.

No, if you sell your items through an online marketplace, and the marketplace facilitator is responsible for collecting state sales tax, the marketplace facilitator will also be responsible for collecting the retail delivery fees.  For more information please review our sales and use guidance publication on Marketplaces

We understand that some retailers may have difficulty implementing this new retail delivery fee program by July 1.  State statute generally requires retailers to add the retail delivery fee to the sale and show it on the receipt or invoice as a separately stated item.  However, the Department currently has no plans to prioritize enforcement of this provision as long as retailers are paying the full amount of the fees due in accordance with their liability under section 43-4-605(6)(c), C.R.S.  

Retailers who are temporarily paying the fees are advised to avoid statements indicating that the retail delivery fee will be assumed or absorbed or that it will not be added to sale as prohibited by section 39-26-108, C.R.S.

Furthermore, for those retailers who are making a good-faith effort to comply with these new requirements, we plan to be generous in granting requests to waive late filing and payment penalties and interest.  However, the Department is not permitted to waive the retail delivery fee itself.  Because you are liable for any uncollected fees, we encourage you to begin collecting the fees on applicable sales as soon as possible to limit your liability.

Returns are due by the 20th day of the month following the reporting period. Most retailers will generally file on a monthly basis, but retailers permitted to file state sales or use tax returns on a quarterly, annual, or other basis will file the retail delivery fee return on the same schedule.

Yes. The retailer must list the fee as a separate item called “retail delivery fees” on the receipt or invoice issued to the purchaser. However, the Department currently has no plans to prioritize enforcement of this provision as long as retailers are paying the full amount of the fees due in accordance with their liability under section 43-4-605(6)(c), C.R.S.  Retailers who are temporarily paying the fees are advised to avoid statements indicating that the retail delivery fee will be assumed or absorbed or that it will not be added to sale as prohibited by section 39-26-108, C.R.S.

Yes, the retail delivery fee will apply whether the motor vehicle used to deliver the goods to the customer is owned or operated by the retailer or by any other person. The retail delivery fees apply whether the retailer delivers the items itself, uses a third party, or tenders the items to a shipping company hired by the purchaser.

No, if a purchaser picks up the items at the retailer’s location, the transaction is not subject to the retail  delivery fees.

The retailer that collects and remits sales or use tax is required to collect and remit the retail delivery fee.

If a retailer overpaid the fee on any previously filed return, and the overpayment is not barred by the statute of limitations, the retailer may claim a credit on their current return against the amount owed by entering the amount of overpayment on the “credits allowed” line. Credit cannot be claimed for an overpayment on a current period if the retailer filed an amended return for the prior period or the Department adjusted the fee for the prior filing period.

The retail delivery fee is based on each sale to the customer. If a customer orders a number of items in a “cart”, and purchases all of the items at the same time, only one retail delivery fee is due regardless of how many deliveries are actually needed to complete the sale. Alternatively, 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 only one delivery is needed to complete the sale.

The fee is due on retail sales that are delivered by a motor vehicle. A motor vehicle is any self-propelled vehicle that is designed primarily for travel on the public highways and is generally and commonly used to transport people and property over the public highways or a low-speed electric vehicle. The retailer must consider all modes of transportation used to make the delivery; including, from the time immediately after the acceptance of the order, until the items are delivered to the purchaser’s specified location.

Yes, because the retail delivery fee is based on the sale containing at least one item that is taxable for state sales or use tax and is due regardless of the shipping costs.

No.The Department’s official guidance can be found on the Current Rules web page, in Rule 43-4-218 (9)(d) which states, “Returned Retail Deliveries. A retail delivery that is returned to the retailer for a full refund of the purchase price and any applicable sales tax is not eligible for a refund or credit of the retail delivery fees collected and paid on such retail delivery.”

No, the retail delivery fee is due from the retailer. The retail delivery fee does not apply to items where consumer’s use tax is paid.

No, the retail delivery fee does not apply to sales an out-of-state retailer makes into Colorado when that retailer is not required to remit sales tax to the State of Colorado. For more sales tax information, visit the Out-of-State Businesses web page. 

Yes, retail deliveries that are delivered by the United States Postal Service are subject to the retail delivery fee if the retail delivery was delivered by a motor vehicle to a location in Colorado.

No, purchases that a customer chooses to pick up in-store at the retailer’s business location are not subject to the retail delivery fee.

The retail delivery fee is not subject to state and state-administered local sales taxes but may be subject to sales tax in self-collecting home rule jurisdictions. Contact the city directly (a directory is available in publication DR 1002) to determine whether it considers the retail delivery subject to sales tax, or search the Colorado Sales Tax Lookup by address. The “retail delivery fee” can be selected from the searchable product and services list.

No, “over-the-counter” sales made by mobile retailers are generally not subject to the retail delivery fee because there is no post-order delivery by a motor vehicle.

The retail delivery fee does not apply when the primary purpose of the job is a service call to a customer’s location in order to repair something, such as a water heater, or diagnose a problem, and in order to complete the job you sell a part or have to replace the item, The service call is not subject to the retail delivery fee whether or not you have the part or item with you when you arrive at the customer’s location or need to make a separate trip to obtain the part or item to complete the job.

The retail delivery fee does apply when, the primary purpose of the job is to replace an item that requires delivery by motor vehicle to the customer’s location, such as a water heater or HVAC unit, the transaction is subject to the retail delivery fee because the customer purchased tangible personal property for delivery by a motor vehicle.