Colorado Adds Retail Delivery Fee That May Require Manual Management

Actions to Take

Bring this Support Notice to the attention of your Information Technology department and/or Essent system administrator.

Issue

A new fee in Colorado has been imposed on retailers who sell in the state.

Colorado’s new Retail Delivery Fee took effect July 1, 2022. Retailers must collect a $0.27 fee for each invoice for an order with taxable goods sent to a Colorado address.

Manual effort may be required for retailers who sell in Colorado and are subject to the fee.

Essent Service Impact Analysis

Essent users who sell in Colorado should review their status under the new fee with an accountant and take corrective action if necessary.

Corrective Action

EssentOne and Compass users who are subject to the fee should:

• Create a charge in the Essent business management system called "Retail Delivery Fee.”
• The fee should be $0.27, the amount established by Colorado. Note that Colorado plans for the amount of the fee to vary with inflation annually and the amount of the charge may need to be updated periodically.
• When required to collect the fee, manually add the charge to the sales order, with a quantity of 1.

The Colorado law details when retailers are required to collect the fee. Consult an accountant to know when the Retail Delivery Fee is required.

More information

The Colorado Department of Revenue provides details about the new fee and when it applies.

While retailers should review their status with an accountant, some notable details are:

• The fee is imposed when any line item on the order is taxable and the order is delivered by motor vehicle. It does not apply to customer pick-up orders.
• The fee is one flat fee per order. Orders shipped in multiple shipments are subject only to one flat fee.
• The fee is to be represented as its own line item, not grouped with sales tax.
• The fee is retroactive to July 1, 2022, even for those who don’t begin to collect it immediately.
• There are not refunds or credits of fee when orders are returned.