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Retail Delivery Fee Retailers

Retailers Liable for the Fee

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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 for the Retail Delivery Fee, unless they qualify for the exemption established by Colorado Revised Statutes (C.R.S.)§43-4-218. 

Colorado Revised Statutes (C.R.S.) §43-4-218 exempts qualified businesses from the Retail Delivery Fee. A “qualified business” is a business whose retail sales of tangible personal property, commodities, or services in Colorado in the previous year totaled $500,000 or less. A business that had no retail sales in Colorado in the previous calendar year is also a “qualified business.” If the business had no retail sales in Colorado in the previous year, the exemption applies until the first day of the filing period that begins at least 90 days after its cumulative sales in Colorado in the current year exceed $500,000.

In general, a retailer is not liable for the fee if the retailer’s total retail sales in Colorado in the prior year were $500,000 or less. Additionally, a retailer is not liable for the fee if they are not required to collect Colorado State Sales Tax because they have no physical location in Colorado and their total annual retail sales in Colorado are $100,000 or less. Please visit the web page for Out-of-State Businesses for additional information.

The $500,000 threshold is calculated by the Department taking your Gross Sales of Goods and Services as reported on your Colorado Sales Tax Return across all sites during a calendar year, and deducting sales listed on Schedule A, Line 1 as Wholesale Sales. Similarly, for Retailer’s Use Accounts, the Gross Sales and Services are added together across all sites in a calendar year, and Line 2A is deducted for wholesale sales. If more than one Sales Tax or Retailer’s Use accounts are present, the totals across all accounts are combined for a business’ total.

The exemption created by C.R.S. §43-4-218 is retroactive to the date the fee was first imposed on July 1, 2022. However, a retailer that is a “qualified business” must nonetheless remit any Retail Delivery Fees that the retailer collected from its customers to the Department. 

The following series of questions can assist a seller in determining whether they are required to collect Colorado state Sales Tax and the Retail Delivery Fee and whether they qualify for the exemption established by C.R.S. §43-4-218. If a seller is not required to collect Sales Tax, they are not required to collect the Retail Delivery Fee, but a seller who is required to collect Sales Tax is not necessarily required to collect the Retail Delivery Fee. 

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Question 1

Do you sell, lease, or deliver tangible personal property or taxable services in Colorado or perform any activity in Colorado in connection with the selling, leasing, or delivering of tangible personal property or taxable services in Colorado? 

  • If yes, proceed to question #2.
  • If no, you are not required to collect either Sales Tax or the Retail Delivery Fee.

Question 2

Do you maintain a physical location in Colorado? 

  • If yes, you are required to collect Sales Tax. Proceed to question #5 to determine if you are also required to collect the Retail Delivery Fee. 
  • If no, proceed to question #3.
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Question 3

In the previous calendar year did you make more than $100,000 of retail sales of tangible personal property, commodities, or services in Colorado, including all sales delivered into Colorado from either inside or outside of the state? 

  • If yes, you are required to collect Sales Tax. Proceed to question #5 to determine if you are also required to collect the Retail Delivery Fee. 
  • If no, proceed to question #4. 

Question 4

In the current calendar year, have you made more than $100,000 of retail sales of tangible personal property, commodities, or services in Colorado, including all sales delivered into Colorado from either inside or outside of the state? 

  • If yes, you are required to start collecting Sales Tax by the first day of the first month commencing at least 90 days after your aggregate retail sales in Colorado for the current year exceed $100,000. Proceed to question #5 to determine if you are also required to collect the Retail Delivery Fee. 
  • If no, you are not required to collect either Colorado Sales Tax or the Retail Delivery Fee for sales made during the current calendar year.
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Question 5

In the previous calendar year, did you have any retail sales of tangible personal property, commodities, or services in Colorado, including all sales delivered into Colorado either from inside or outside of the state? 

  • If yes, proceed to question #6.
  • If no, skip to question #7.

Question 6

In the previous calendar year, did your retail sales of tangible personal property, commodities, or services in Colorado, including all sales delivered into Colorado either from inside or outside of the state, exceed $500,000? 

  • If yes, you are required to collect the Retail Delivery Fee for sales made during the current calendar year. 
  • If no, you are not required to collect the Retail Delivery Fee for sales made during the current calendar year.
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Question 7

In the current calendar year, have your retail sales of tangible personal property, commodities, or services in Colorado, including all sales delivered into Colorado either from inside or outside of the state, exceeded $500,000? 

  • If yes, you are required to start collecting the Retail Delivery Fee by the first day of the first month commencing at least 90 days after your aggregate retail sales in Colorado for the current year exceed $500,000. 
  • If no, you are not required to collect the Retail Delivery Fee for sales made during the current calendar year.

Frequently Asked Questions

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If you do not qualify for the exemption established by C.R.S. §43-4-218, discussed above, your liability for the fee will generally depend on how you bill your customers.

If you bill your customers on a time and materials basis, the Retail Delivery Fee typically applies. A contractor who bills their customers separately for labor and materials is considered a time and materials contractor. Generally, these contractors purchase tangible personal property at wholesale and resell the items to their customers in the completion of a job. If the job’s primary purpose is to sell and install taxable tangible personal property that requires delivery by a motor vehicle to the customer’s location in Colorado, the Retail Delivery Fee does apply.

If you bill your customers on a lump-sum contract, the Retail Delivery Fee typically does not apply. A contractor who bills their customers on a lump-sum basis is considered a lump-sum contractor. Generally, these contractors purchase tangible personal property at retail and are considered the user and consumer of the tangible personal property used to complete a job. A lump-sum contractor is not required to remit the retail delivery fees because a lump-sum contractor is not making retail sales to their customers. When a lump-sum contractor purchases taxable tangible personal property that will be delivered by motor vehicle to the contractor, either at the contractor’s location or the jobsite, the retailer making the sale to the contractor must charge the Retail Delivery Fees to the contractor.