JULY 2023 UPDATE:
Effective July 1, 2023, the Colorado Retail Delivery Fee (Colorado RDF) will increase from $0.27 to $0.28.
For more information, read this blog from Avalara: "Colorado may simplify retail delivery fee requirements"
Beginning July 1st, 2022 Colorado will impose a $0.27 retail delivery fee on all deliveries by motor vehicle to a location in Colorado. The fee is per order and applies if there is any taxable item in the order. Wholesale or other exempt sales are not subject to this fee.
The fee is displayed on the sales invoice. It is charged to the customer by the retailer and that retailer is liable to collect the fee and remit the total of all fees due on a new return, DR 1786. More information can be accessed at the Colorado Department of Revenue website: https://tax.colorado.gov/retail-delivery-fee
Who is impacted?
Retailers licensed to make sales in Colorado. Examples include, but not limited to: Restaurants that deliver, grocery stores that deliver, flower delivery services, sales that require delivery, furniture, appliances, electronics, online stores that ship orders, B-to-B retail sales excluding wholesales.
What are the State Registration requirements?
- No registration fee
- No additional license required
- Retailers cannot opt-out of the automatic registration
- For taxpayers with an active sales tax account, a retailer license, and any sales tax liability reported after January 1, 2021:
- As a courtesy, the CO DOR will automatically register your business for an RDF account by July 1, 2022.
- Additionally, any open out-of-state retailers or retailer’s use account holders will be automatically registered for an RDF account
- Retailers who open accounts after July 1, 2022, or who don’t meet the criteria above, will be able to register:
- through Revenue Online
- by filing the Retail Delivery Fee Return, form DR 1786
- or by submitting form CR 0100AP
Setup Sales Tax for the Colorado Retail Delivery Fee.
- From the Library Master Module à Setup Menu à Sales Tax Code Maintenance Task.
- Create New Tax Code for the Colorado Retail Delivery Fee (CORDF)
- Enter Taxable limit of $0.27
- Select the checkbox under the Sales column for the TX line and enter 100.000 as the Tax Rate
From the Library Master Module à Setup Menu à Sales Tax Schedule Maintenance Task.2. Select Tax Schedule Maintenance
- Create or Select a Colorado Tax Schedule
- Tax Codes for Colorado State
- And the CORDF must be selected on the lines.
3. Assign New Tax Schedule to Customers in Customer Maintenance
- Customers previously assigned same Tax Schedule that CORDF was added to, require no change.
- Global Customer Field Change in Accounts Receivable Utilities can be used to assign New Tax Schedules as needed.
4. When printing Invoices, the Colorado Retail Delivery Tax MUST be documented on the invoice.
- The AR_InvoiceWrk and SO_InvoiceWrk are populated with the SalesTaxAmount (Total Sales Tax including Colorado Delivery Fee)
- The SalesTaxAmt2 is populated with only the Colorado Delivery Fee amount. $0.27 Retail Delivery Fee (CORDF) on all deliveries by motor vehicle to a location in Colorado with at least one item of tangible personal property subject to state sales and use tax.
5. Modify Invoice to display Colorado Retail Delivery Fee
- Enter Form Code such as CO Delivery Fee
- Select Description
- Click on Designer button
- Insert SalesTaxAmt2 to the form under the SalesTax Line and create Text box with Description. (This amount is already included in the Sales Tax so it will not be added to the Invoice Balance.)
(Source: Sage KB # 11886)
Avalara AvaTax Environments with Sage 100
- For Avalara, it is necessary to use a non-inventory item (/Miscellaneous Item defined in Miscellaneous Item Maintenance) such as /CORDF the Description can read “Colorado Retail Delivery Fee Applied”. That non-inventory item then needs to be setup with the Avalara specified SST tax code.
- In AvaTax, go to Settings à What you Sell
- Click Add an Item
- Enter the item code and description. It must match exactly with what you have set up in Sage 100
- Assign the Sales Tax Code OF400000
- The item should be added to an order with a Quantity on one (1) and a Sell Price of zero $ 0.00. Avalara will generate the tax fee accordingly. Since this fee must be noted on the Invoice, setting the description to read “Colorado Retail Delivery Fee Applied”, meets this requirement
- You will need to setup a new Sales Tax Code in Library Master à Setups à Sales Tax Code Maintenance. Use Tax Code: OF400000 with the Description Colorado Retail Delivery Fee
- Next, you will need to add the new Sales Tax Code to the existing AvaTax Sales Tax Schedule in Library Master à Setups à Sales Tax Code Maintenance
- When Sales Tax is calculated, it will include the $ 0.27 fee.
Read more Here