Colorado and Minnesota now impose Retail Delivery Fees on deliveries by motor vehicle to locations in these states with at least one item of tangible personal property (totaling $100 or more in MN) subject to state Sales or Use Tax.
The retailer or marketplace facilitator that collects the Sales or Use Tax on the tangible personal property sold and delivered, including delivery by a third party, is liable to remit the Retail Delivery Fee. Deliveries include when any taxable goods are mailed, shipped, or otherwise delivered by motor vehicle to a purchasers in these states.
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What is Colorado’s Retail Delivery Fee?
- Beginning July 1st, 2022 Colorado imposed a new flat retail delivery fee on all deliveries made to addresses in Colorado. The fee is currently $0.28.
- Beginning July 1st, 2022 Colorado imposed a new flat retail delivery fee on all deliveries made to addresses in Colorado. The fee is currently $0.28.
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What is Minnesota's Retail Delivery fee?
- Starting July 1st, 2024 Minnesota imposed a Retail Delivery Fee of $0.50 (50 cents) that applies to most transactions involving retail delivery in Minnesota. Retail delivery means a delivery to a person located in Minnesota of certain items as part of a retail sale (see Minnesota Statutes, Chapter 168E). The fee applies to each transaction where charges for tangible personal property subject to sales tax (see exclusions here) equals or exceeds $100.
- The MN Retail Delivery fee is shown as a separate line item on the receipt as “Road Improvement and Food Delivery Fee”
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What does the fee pay for in Colorado?
- Here’s Colorado’s fee breakdown:
- Here’s Colorado’s fee breakdown:
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Is this fee just a new tax?
- While similar, the retail delivery fee is charged as an additional flat charge on each transaction and does not vary with purchase price like other taxes.
- While similar, the retail delivery fee is charged as an additional flat charge on each transaction and does not vary with purchase price like other taxes.
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Do I need to pay the fee on each item ordered?
- Not necessarily – the fee is charged once per transaction, so if multiple items are ordered at the same time in a single transaction the fee will only be charged once, likewise. This also goes for items shipped separately or at different times. For example, if a monthly book club subscription sends books once a month but is paid in a single lump-sum for a year, the fee is only charged a single time on the originating transaction.
- The MN Retail Delivery Fee only applies to transactions of $100 or more which are subject to sales tax
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Who does the fee affect?
- The CO fee is charged “to retail sales of tangible personal property for delivery by a motor vehicle to a purchaser at a location in Colorado” and includes tangible goods shipped to Colorado addresses from other states.
- Similarly, the MN fee is charged to deliveries to locations inside of Minnesota
- These fees in either state do not affect purchases between wholesalers unless delivery of wholesale-purchased goods also “includes both items for resale (wholesale sales) and goods subject to state sales or use tax.”
- Where can I learn more?