A new retail delivery fee is taking effect in Colorado on July 1, 2022. Retailers will have to collect the $0.27 fee every time they deliver taxable goods to a Colorado address. This will add a layer of compliance complexity for both in-state and out-of-state retailers.
The $0.27 fee applies to retailers selling taxable tangible goods for delivery by motor vehicle to Colorado consumers, no matter who owns or operates the vehicle used to make the delivery, and whether the delivery originates in Colorado or another state. Retailers must separately state the retail delivery fee on all customer invoices and receipts. Note: the fee is levied on all qualifying deliveries, even when shipping is free.
The fee doesn’t apply when otherwise taxable goods are delivered to a purchaser that is exempt from the state sales tax, such as government or charitable organization.
Likewise, the fee doesn’t apply to deliveries of nontaxable goods, including wholesale sales, so long as the property delivered is exempt from the state sales tax. If a delivery includes both taxable and exempt goods, the delivery fee will apply.
Review the delivery fee imposed by Colorado here: https://tax.colorado.gov/retail-delivery-fee
Because this is an unusual case of a shipping charge needing to be treated similar to a tax, there isn't a perfect solution built-in the software. After discussion, we have come up with a solution that might work for most cases.
1) Create a unique Shipping Zone specifically for Colorado
2) Remove Colorado from any other Shipping Zones
3) Duplicate any Shipping Methods that would be applicable to Colorado and assign the new Colorado Only Zone to each.
4) On the configuration page for each Colorado only shipping method, use the Handling Fee field and enter 0.27 with a Fixed Amount
5) Select the option to "Show handling fee separately"
6) The fee is not taxable, so leave the Handling Tax Code selection blank.
7) Save the changes.
8) Test a shipment to both Colorado and any other state to make sure the shipping methods appear for each respectively.
If you don't already use handling fees, and would like to customize the handling fee name to coincide with the type of charge, you can edit the language that is shown to the customer:
1) From the admin, go to Configure > Store > Languages page
2) click the Edit Resources button
3) Seach *handling* in the name field.
4) For the two results, edit the translation to something like "Retail delivery Fees"
These steps should take care of most cases.
Unfortunately, if you have tax exempt orders, the 0.29 charge may need to be removed after the order is placed.
This is the first time we've seen this type of shipping charge, so if you have any questions, concerns or additional information to provide, please post here.
This feature is built-in to the latest version of AbleCommerce 9.0.7, for both AvaTax and custom AbleCommerce taxes.
Edited by user Monday, October 17, 2022 11:37:02 AM(UTC)
| Reason: feature added to latest release