It’s July 1st and for those who ship orders to Colorado, and who doesn’t, it’s the day to start collecting a new fee on those orders. Yes, in the latest attempt at states to capitalize on the ever-increasing amount of online orders, Colorado is the first state to institute a Retail Delivery Fee (RDF).
According to the state, this new fee is imposed “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.” So basically, any taxable item delivered to a customer’s door via a motor vehicle is subject to this new fee.
The fee itself isn’t all that much, just $0.27 per order, but this is yet another burden placed upon eCommerce merchants to collect, report, and pay.
Now there is a silver lining, so keep reading!
Colorado’s sales tax laws require out-of-state merchants (aka online sellers) to collect sales tax ONLY if sales in the state are more than $100,000.00 annually. Simply put, if you’re not collecting sales tax on online sales to CO right now, you don’t need to collect the RDF.
If you’re a merchant who is obligated to collect the new Colorado Retail Delivery Fee and are using a service such as TaxJar or Avalara to collect sales tax, we suggest you contact them directly to see how they are handing this new fee for you.
If you’re not using a sales tax management service and collect and report taxes on your own, you can set up your store to collect this new fee yourself.
BigCommerce Setup for Colorado Retail Delivery Fee
The easiest way for setting up your BigCommerce store to collect the Colorado Retail Delivery Fee is to set up a handling fee rule within the store. We’ve put together a short tutorial with instructions on how to do this, which you can watch below.
Stores on Platforms other than BigCommerce
If you’re not on BigCommerce, we recommend you contact your platform’s support department to determine how to set up your store to collect the new Colorado Retail Delivery Fee.