Colorado's retail delivery fee

Colorado is introducing a new retail delivery fee, effective from July 1st 2022. Retailers will have to collect $0.27 every time taxable goods are delivered to an address in Colorado, introducing a layer of compliance complexity for retailers both in and out of the state.

The fee applies to retailers who sell taxable, tangible goods for delivery by motor vehicle to Colorado consumers, regardless of:

  • who owns or operates the delivery vehicle
  • whether the delivery originates in or out of the state
  • whether shipping is free or not

The fee must also be stated separately on all customer invoices and receipts.

The fee does not apply in the following situations:

  • When otherwise taxable goods are delivered to a consumer that is exempt from the state sales tax (e.g. government, charitable organizations)
  • Deliveries of nontaxable goods, including wholesale sales, if the entire delivery is exempt from the state sales tax. It does apply if the delivery contains both taxable and exempt goods.

What you need to do

For Brightpearl customers, this fee should only be applicable to manual orders where tax is calculated in Brightpearl.

It can be automatically added to orders using the Automation app.

Follow these three steps in order to perform the setup:

  1. Create a non-stock tracked product with a price of $0.00 for the Colorado retail delivery fee.
  2. In your product tax status custom field, enter the code "OF400000" (without quotes). If you do not have a product tax status custom field, learn more here.
  3. Create an Automation rule with:
    1. A condition of "Delivery State is Colorado"
    2. An action to add a free SKU, using the SKU from step 1
      Learn more about creating Automation rules here.

You may also wish to add conditions regarding which channels are affected.

Ensure this rule acts before any invoicing rules.

Read more about the Colorado retail delivery fee on Avalara's help center here.

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