Ecommerce Sales Tax Rate Changes in 2023: The Colorado Retail Delivery Fee

When the Colorado retail delivery fee was rolled out in July 2022, things got off to a rocky start.

One year later, the state passed further legislation exempting certain retailers from the fee. It’s just one of a few Colorado eCommerce sales tax rate changes in 2023. Here’s what it means for you.

Colorado Retail Delivery Fee Details

Colorado’s retail delivery fee was the first of its kind, a 27-cent fee on the delivery of tangible goods to addresses in Colorado. The purpose of the fee is to support the Centennial State’s transportation infrastructure.

Initially, retailers had to list the fee on the invoice or receipt, collecting it from each customer. The fee applied per delivery, so no matter how many items were purchased or the size of a delivery, it was 27 cents.

Sellers pay the retail delivery fee to the state when they file and pay their sales tax. The fee is only collected with delivery orders when sale tax is collected, too. If a customer’s order contains only items that are tax-exempt, sellers don’t have to collect the retail delivery fee.

Exemptions to the Colorado Retail Delivery Fee

Starting July 1, businesses with less than $500,000 in sales the previous year no longer need to collect the fee.

The new legislation also allows sellers to pay the fee out of their own pockets rather than requiring them to pass it on to their customers or include it as a line item on invoices or receipts.

Colorado Sales Tax Rate Changes in 2023

Colorado didn’t just tweak the requirements for the Retail Delivery Fee. It also changed the rate. Starting July 1, the fee will increase to 28 cents per delivery.

It’s just one of a few Colorado eCommerce sales tax rate changes in 2023. State and local sales taxes get updated twice a year, on January 1 and July 1. In July of this year, several Colorado cities are updating their sales tax exemptions while Grand Junction, Colorado, is bumping its sales tax rate up to 3.39% from 3.25%.

What Do These Sales Tax Rate Changes Mean for Your Business?

What do Colorado’s retail delivery fee and sales tax rate changes mean for your ecommerce business? If you have nexus with the state and need to collect tax, the amount you collect will change in certain areas.

But don’t sweat those changes. TaxCloud will automatically make the adjustments, so you can be confident that you’re collecting the right tax amount on every sale. Talk to our team today to learn more.