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.

Retailers that make retail deliveries must show the total of the fees on the receipt or invoice as one item called “retail delivery fees”.

If every item in a retail sale is exempt from sales tax, the delivery is also exempt from the retail delivery fee. However, if one or more items in the transaction are subject to sales tax, the retail delivery fee is due. Each sale for delivery is considered a single “retail delivery” regardless of how many shipments are needed to deliver the items purchased.

Frequently Asked Questions

1. Does the retail delivery fee apply to tangible personal property delivered outside of Colorado?
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.

2. Are wholesale retailers required to collect the Retail Delivery Fee when delivering products to other licensed dealers?
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.

3. Who is liable for the retail delivery fee? Do I charge the fee to my customers?
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.

4. Is the retail delivery fee required to be printed on our invoices or receipts?
Yes, the retailer must list the fee as a separate item called “retail delivery fees” on the receipt or invoice issued to the purchaser. However, the Department currently has no plans to prioritize enforcement of this provision as long as retailers are paying the full amount of the fees due in accordance with their liability under section 43-4-605(6)(c), C.R.S. Retailers who are temporarily paying the fees are advised to avoid statements indicating that the retail delivery fee will be assumed or absorbed or that it will not be added to sale as prohibited by section 39-26-108, C.R.S.

5. Does the retail delivery fee apply to deliveries made by third-parties?
Yes, the retail delivery fee will apply whether the motor vehicle used to deliver the goods to the customer is owned or operated by the retailer or by any other person.

6. When I use a third-party delivery service, who will be charging the fee?
The retailer that collects and remits sales or use tax is required to collect and remit the retail delivery fee.

7. My customer ordered multiple items, do I charge one delivery fee for all or multiple?
The retail delivery fee is based on each sale to the customer. If a customer orders a number of items in a “cart”, and purchases all of the items at the same time, only one retail delivery fee is due regardless of how many deliveries are actually needed to complete the sale. Alternatively, if a customer orders a number of items and completes the purchase of each item at different times, the retail delivery fee is due on each sale, even if only one delivery is needed to complete the sale.

8. Is this fee limited to road transportation of taxable retail deliveries in the state of Colorado?
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.

9. Does the retail delivery fee apply when the shipping is free to the purchaser?
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.

10. Is the Retail Delivery Fee refundable to the consumer on returned orders?
The Department’s official guidance can be found on the Current Rules web page, in Rule 43-4-218 (9)(d) which states, “Returned Retail Deliveries. A retail delivery that is returned to the retailer for a full refund of the purchase price and any applicable sales tax is not eligible for a refund or credit of the retail delivery fees collected and paid on such retail delivery.” To request a general information letter or a private letter ruling, visit the Letter Rulings web page for more information.