Retail Delivery Fee

Unless the exemption established by Senate Bill 23-143 applies, 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, “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.
 

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 collect the retail delivery fees from their customers 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. 
 

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.

In general, 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. The retailer is liable for any uncollected fees.

Beginning July 1, 2023, Senate Bill 23-143 permits retailers 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. 

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

In general, yes. The retailer is required to list the fee as a separate item called “retail delivery fees” on the receipt or invoice issued to the purchaser. However, beginning July 1, 2023, Senate Bill 23-143 permits retailers 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. 

Yes, unless the exemption established by Senate Bill 23-143 applies. Additionally, if a retailer that qualifies for exemption under Senate Bill 23-143 collects the retailer delivery fee from any of its customers, that retailer is required to remit the collected fees to the Department along with a return prepared for the applicable period.

If you started making retail deliveries after July 2022, you are required to file retail delivery fee returns, starting with the period you first made retail deliveries. To change the start date of your retail delivery fee account from July 1, 2022 to a different date, you may either:

• Notify the Department of the first date that you made retail deliveries. Submit a web message on your Revenue Online account, email DOR_TaxpayerService@state.co.us, or call the Taxpayer Helpline at 303-238-7378, so your account start date can be updated, or;
• File zero returns for every period, until the fee is collected and reported.

If you do not take on of the above actions you will receive a non filer notification and the Department will bill you for the estimated fees owed for any period that does not have a return already filed. 

Yes, the Department considers all protests received. Although the Department plans to be generous in considering waiver requests for penalty and interest for retailers who make a good-faith effort to comply with these new requirements, be sure to submit the protest within 30 days of the notice of deficiency and to include your good cause reason with supporting documents (if applicable) in the protest. Go to the protest rights page for more information. The Department is not permitted to waive the retail delivery fee itself. 

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.

There is a $15.00 minimum penalty for returns filed or paid after the due date, even if no fee is due with the return. If you disagree with the balance due, you must protest within 30 days from the notice of deficiency. 

Yes, the retail delivery fee applies 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 or marketplace facilitator 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 line 6, “credits allowed”. 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. Each retail sale is a single retail delivery regardless of the number of shipments necessary to deliver the items of tangible personal property purchased. The retail delivery fee will not be applicable more than once per retail sale, regardless of the quantity or timing of the payment(s) made by the purchaser, the number of shipments in which the purchased items are delivered, or the number of locations to which the shipments are delivered. The retailer must determine and document how each shipment is attributed to a retail 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. A retailer may not refund the retail delivery fees imposed on a retail delivery when the purchased tangible personal property is returned to the retailer for a full refund of the purchase price and any applicable sales tax. A subsequent delivery to return the tangible personal property to the retailer is not subject to the retail delivery fees because no retail sale has taken place. 

However, a retailer may claim a credit for previously paid retail delivery fees for any retail sale that was canceled before the item was shipped if the retailer refunded to the purchaser the full purchase price, the retail delivery fees, and any applicable sales tax.

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.