Deliveries That Are Subject to the Fee
The Retail Delivery Fee applies to any retail sale of tangible personal property for delivery by a motor vehicle to a location in Colorado. 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, a low-speed electric vehicle, or an autocycle. The fee applies regardless of whether the motor vehicle is owned or operated by the retailer or by anyone else (a “third-party”), such as a shipping company or the United States Postal Service.
In determining whether a delivery is made by motor vehicle and whether the fee applies, a retailer must consider all modes of transportation used to make the delivery from the time immediately after the acceptance of the order until the items are delivered to the purchaser’s specified location.
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 a single “retail delivery” regardless of how many shipments are needed to deliver the items purchased.
The fee does not apply in any of the following situations:
- The purchaser picks up the tangible personal property at the retailer’s business location.
- The tangible personal property is delivered to a location outside of Colorado.
- Wholesale sales made to licensed retailers for the purpose of resale.
- The delivery is made entirely without the use of a motor vehicle (e.g. the delivery is made exclusively by bicycle, electrical assisted bicycle, electric scooter, or low-power scooter).
If the seller did not collect either Sales Tax or the Retail Delivery Fee, the purchaser may be liable for Consumer Use Tax, but the purchaser is not required to pay the fee directly to the Department. Please see the Colorado Consumer Use Tax Guide for information about consumer use tax.
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, “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.