Mandatory Colorado Retail Delivery Fee Update

[John Frazar]

Effective July 1st, 2022, Colorado law requires a retail delivery fee on all deliveries by motor vehicle to a location in Colorado containing at least one item of tangible personal property subject to state sales or use tax.

Stone Edge is working quickly to add support for this requirement and plan to have it released within the next week in SEOM v7.732.  

What is required:

To summarize the official notice posted at https://tax.colorado.gov/retail-delivery-fee, any retailer who ships tangible goods to Colorado for delivery by motor vehicle must charge a $0.27 Retail Delivery Fee (aka tax) and you must include a line item on your invoices/receipts that says “Retail Delivery Fees”. 

So, unless you are delivering your orders by bicycle courier, this applies to YOU and you must take action!

What is the fix:

Version 7.732 will introduce a system parameter that will tell SEOM to add the “Retail Delivery Fees” line item as a $0.00 order adjustment as per the State requirement.  If this setting is enabled and the order’s “Ship To State” is Colorado, the line item will be added.  It will need to be enabled regardless of your Sales Tax Calculation method.

There will also be a column added to the Sales Tax Rates table that will allow you to add a “Flat Tax Amount”.  If you are using the Order Manager Sales Tax Calculation method, you will be required to add Colorado as a state and add “$0.27” to the flat tax amount for CO.  Should any other states copy Colorado, SEOM is now future-proofed to be able to accommodate any variable tax rate or flat tax rate for any City or State.  If you are using a 3rd Party Sales Tax Compliance Solution (Avalara, TaxJar, AccurateTax), you do not need to do this step, as they should add the retail delivery fee into the overall tax rate that is returned to Stone Edge.  Please check with your Tax Compliance solution and/or the State of Colorado for any additional filing requirements. 

Please note that this applies to manually entered orders only.  Since web orders originate in your e-commerce platform/shopping cart software, the onus is on your e-commerce platform to ensure web orders comply with this requirement. 

Workaround

If you are unable to update to Version 7.732, we recommend one of the following workarounds:

1. Create a non-taxable SKU with the item name “Retail Delivery Fee” at a price of $0.27.  Manually add this to Colorado orders.

2. If you use a 3rd Party Sales Tax Compliance solution and just need to get the “Retail Delivery Fee” statement added to invoices, Stone Edge can make a customization to your invoices and/or packing slip templates with a message that discloses the Retail Delivery Fee for orders shipping to CO. Contact Stone Edge Technologies at sa...@stoneedge.com for information about customizations.

[Timothy Levine]

Could you provide some details on “If you use a 3rd Party Sales Tax Compliance solution and just need to get the “Retail Delivery Fee” statement added to invoices, Stone Edge can make a customization to your invoices and/or packing slip templates with a message that discloses the Retail Delivery Fee for orders shipping to CO. Contact Stone Edge Technologies at sa...@stoneedge.com for information about customizations” for people using order versions and Avalara or Tax Jar?

 

From: ston...@googlegroups.com [mailto:ston...@googlegroups.com] On Behalf Of John Frazar
Sent: Thursday, June 23, 2022 10:51 AM
To: Stone Edge User Group
Subject: [Stone Edge User Group] Mandatory Colorado Retail Delivery Fee Update

 

Effective July 1st, 2022, Colorado law requires a retail delivery fee on all deliveries by motor vehicle to a location in Colorado containing at least one item of tangible personal property subject to state sales or use tax.

Stone Edge is working quickly to add support for this requirement and plan to have it released within the next week in SEOM v7.732.  

What is required:

To summarize the official notice posted at https://tax.colorado.gov/retail-delivery-fee, any retailer who ships tangible goods to Colorado for delivery by motor vehicle must charge a $0.27 Retail Delivery Fee (aka tax) and you must include a line item on your invoices/receipts that says “Retail Delivery Fees”. 

So, unless you are delivering your orders by bicycle courier, this applies to YOU and you must take action!

What is the fix:

Version 7.732 will introduce a system parameter that will tell SEOM to add the “Retail Delivery Fees” line item as a $0.00 order adjustment as per the State requirement.  If this setting is enabled and the order’s “Ship To State” is Colorado, the line item will be added.  It will need to be enabled regardless of your Sales Tax Calculation method.

There will also be a column added to the Sales Tax Rates table that will allow you to add a “Flat Tax Amount”.  If you are using the Order Manager Sales Tax Calculation method, you will be required to add Colorado as a state and add “$0.27” to the flat tax amount for CO.  Should any other states copy Colorado, SEOM is now future-proofed to be able to accommodate any variable tax rate or flat tax rate for any City or State.  If you are using a 3rd Party Sales Tax Compliance Solution (Avalara, TaxJar, AccurateTax), you do not need to do this step, as they should add the retail delivery fee into the overall tax rate that is returned to Stone Edge.  Please check with your Tax Compliance solution and/or the State of Colorado for any additional filing requirements. 

Please note that this applies to manually entered orders only.  Since web orders originate in your e-commerce platform/shopping cart software, the onus is on your e-commerce platform to ensure web orders comply with this requirement. 

Workaround

If you are unable to update to Version 7.732, we recommend one of the following workarounds:

1.   Create a non-taxable SKU with the item name “Retail Delivery Fee” at a price of $0.27.  Manually add this to Colorado orders.

2.   If you use a 3rd Party Sales Tax Compliance solution and just need to get the “Retail Delivery Fee” statement added to invoices, Stone Edge can make a customization to your invoices and/or packing slip templates with a message that discloses the Retail Delivery Fee for orders shipping to CO. Contact Stone Edge Technologies at sa...@stoneedge.com for information about customizations.

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[John Frazar]

I'm not sure what you're asking... 3rd Party Sales Tax solutions like Avalara, will automatically bake the delivery tax into the total sales tax collected for the order, therefore, if you're using a tax service the only thing you need to do to be compliant with CO is have a line on your invoices that reads "Retail Delivery Fees".  We can customize that for you if you are not willing to upgrade to 7.732.

[Mike Yeager]

FYI TaxJar let me know via email this morning they will NOT be collecting the CO Retail Delivery Fee: 

"I wish we could be more helpful here, but at this time TaxJar is solely focused on sales and use taxes. From our understanding, Colorado’s new Retail Delivery Fee is a separately stated fee imposed on qualifying deliveries and requires a retail delivery fee account to pay the collected fee to the state. We do not support calculating, reporting, or filing for taxes or fees that fall outside of the sales and use tax scheme, which includes Colorado’s new Retail Delivery Fee, as well as admission taxes, lodging taxes, fuel taxes, and bottle deposit fees."

--Mike Yeager
Production and IT Manager

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