Avalara Outlines Setup for July 1, 2022 Colorado Retail Delivery Fee

Beginning July 1, 2022 if you are shipping taxable goods to a Colorado address you’ll likely need to collect a .27 per order retail delivery fee.

According to the Avalara website:

Overview
Beginning July 1, 2022, the state of Colorado is imposing a $0.27 Retail Delivery Fee (RDF) on all deliveries by motor vehicle to a location in Colorado with at least one item of tangible personal property subject to state sales and use tax.

Retailers must separately state the retail delivery fee on all customer invoices and receipts.

Note: The fee is levied on all qualifying deliveries, even when shipping is free.

Avalara is going to support this new fee by creating a Colorado Retail Delivery Fee tax code which companies will add onto the order lines to indicate which transactions should be subject to the new fee.

For more information you can review the Avalara Help Center article as well as the State of Colorado website.

About the 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, the DR 1786 form. 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.