In 2021 the Colorado legislature passed Senate Bill 21-260, approving multiple new fees to increase funding for transportation. In Colorado, fees are often used to increase revenue without running into issues with the state’s Taxpayer Bill of Rights (“TABOR”) which requires new taxes to be approved by general referendum. Senate Bill 21-260 was signed into law by the Governor and scheduled to begin July 1, 2022.

The new fees take into account the current inflation and are on gasoline, diesel, retail deliveries, rental vehicles, and electric vehicle registrations. In May 2022, with increasing gasoline and diesel prices, the legislature voted to postpone the additional gasoline and diesel fees until April 1, 2023.

What is the Retail Delivery Fee?

One of the fees included in SB 21-260 is the Retail Delivery Fee*. Structured like sales tax, except that instead of a rate times the taxable base, it is imposed as a flat fee per “retail delivery.” This Retail Delivery Fee becomes effective on July 1, 2022.

Essentially, the new Retail Delivery Fee is a flat $0.27 fee for every “retail delivery” in the Colorado. A retail delivery is a sale to containing at least one physical item and is delivered by a vehicle, including by third-party common carriers. A retail delivery only involves deliveries to end-users and does not include sales to retailers by wholesalers. Additionally, every delivery is subject to the fee regardless if orders require multiple deliveries.

Six smaller fees are incorporated under The Retail Delivery Fee but on invoice it is represented by a single charge. The fee is indexed to inflation rates meaning it will change annually.

Who is Responsible for the Retail Delivery Fee?

The fee is imposed on the person(s) or entities that purchase the physical personal property that is delivered by a motor vehicle. Essentially, it collects the fee from whomever is paying the sales tax.

Exemptions
The legislation does not include any direct exemptions for The Retail Delivery Fee. However, by definition, it only effects items that the sales tax is already imposed on. So, a sale exempt from sales tax would also be exempt from the Retail Delivery Fee.

How is the Retail Delivery Fee Remitted?

The Retail Delivery Fee will be reported and paid using the new DR 1786 form. This form is filed when the company’s sales tax return is filed. Depending on entities’ taxable sales, they can file annually, quarterly, or monthly. DR 1786 is only filed at the state level and requires no additional attention for jurisdictions.

How Do You Register for the Retail Delivery Fee?

The Retail Delivery Fee will be separate from sales tax accounts. Companies already registered with Colorado’s sales tax prior to July 1, 2022, will automatically be registered for the Retail Delivery Fee.

After July 1, 2022, there are several ways to obtain an account:

*FWEDA members can login to the Members Only Portal for additional information and guidance.

Source: Eide Bailly

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