As of July 1st, 2022, Colorado is imposing a new "retail delivery fee" of $0.27 per order on all deliveries by motor vehicle (such as a USPS® or UPS® truck) that contain at least one item of taxable goods in the package. Online marketplaces like eBay or Etsy are liable for collecting and paying these fees, as well as retailers who sell through their own websites or non-marketplace sales channel.
Here's what we know so far:
This delivery fee only applies to out-of-state businesses if you make more than $100,000/year in sales to Colorado
If your business is located outside of Colorado but ships LESS than $100,000 of goods to Colorado per year, you're exempt from the new sales tax licensing and collection requirements 👍
When using the $100,000 threshold to determine if your business is exempt, the Colorado Department of Revenue says that "a multichannel seller should not consider any retail sales that were facilitated by a marketplace facilitator through a marketplace."
Basically, since marketplaces are responsible for collecting sales tax, they are the responsible parties for collecting and remitting these new delivery fees to Colorado... so if your business isn't based in Colorado, you only need to worry about this new tax if you sell more than $100,000/year to Colorado through your own sales platform (like your own website).
Colorado businesses are required to collect and remit the retail delivery fees for Colorado deliveries
If your business is based in Colorado, you may be liable for this tax on any in-state sales. Make sure to read all the resources that are linked at the bottom of this article, and reach out to your state's tax department if you need any help.
The delivery fee applies to each sale for a customer, regardless of the number of items or packages in the order
Colorado applies these retail delivery fees to each sale, so even if an order takes multiple packages to deliver, only one delivery fee for that sale is due.
What if I sell on a marketplace like eBay or Etsy?
Marketplaces are required to collect and remit delivery fees to the Colorado Department of Revenue, so if for example you sell on eBay or Etsy you won't need to pay any delivery fees yourself, since those marketplaces are responsible for collecting and paying these types of taxes—but your Colorado customers may notice the new fee as a line item in the sales on those platforms.
What are the fees?
Below is a breakdown of the new retail delivery fees:
Community Access Retail Delivery Fee
Clean Fleet Retail Delivery Fee
Clean Transit Retail Delivery Fee
General Retail Delivery Fee
Bridge and Tunnel Retail Delivery Fee
Air Pollution Mitigation Retail Delivery Fee
Total Retail Delivery Fee
For more detailed info on the new retail delivery fee for Colorado-bound shipments, check out the following resources:
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