Colorado SB21-260 Bill Sustainability Of The Transportation System authorized the imposition of multiple Retail Delivery Fees effective 7/1/22. The Retail Delivery Fee is on all deliveries by motor vehicle to a location in Colorado with at least one item of tangible personal property subject to state sales or use tax including deliveries made by a 3rd party carrier.

From the CO DOR:
Effective July 1, 2022, Colorado imposes a retail delivery fee on all deliveries by motor vehicle to a location in Colorado with at least one item of tangible personal property 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 collect and remit the retail delivery fee. Deliveries include when any taxable goods are mailed, shipped, or otherwise delivered by motor vehicle to a purchaser in Colorado.

The retail delivery fee is due at the same time as your sales tax return. Returns are generally filed on a monthly basis and must be filed on or before the 20th day of the month following each reporting period. Retailers permitted to file state sales tax returns on a quarterly, annual, or other basis will file the retail delivery fee return on the same schedule.

The retail delivery fee will be reported and paid on a new return, the DR 1786 form. The retail delivery fee is collected state-wide, does not need to be separated by jurisdiction, and is calculated per sale. The retail delivery fee is made up of six different fees. The rates are listed below.

STC Opinion:
Given this new extra layer of collection burden upon Colorado businesses and those selling into the State with Economic Nexus and Marketplace facilitators, I highly recommend retailers provision for their customers to arrange their own shipment and delivery. The sale would then take place at the Retailer’s business location, greatly simplifying sales tax collection and remittance. Ownership, risk of loss, title, possession, etc. would transfer there at the Retailer’s location vs. at the customer’s location when the Retailer arranges for delivery.

That means simplified Colorado State filings with only your physical location return due not a bunch of non-physical location branch/ site ID returns for sale across the state. It also means licensing with perhaps just your own home-rule city, if applicable, rather than multiple other home-rule cities that have made changes to their definitions of “engaged in business” such that more than one sale with delivery into their city, even by a 3rd party carrier, can require licensing.

“SALTernatively” (State and local tax alternatives): To avoid the burden of administering Retailer Delivery Fees, I’d consider pushing for drone delivery.  Based upon FAQ 12, drone delivery wouldn’t be subject to the fee as they are not : “…designed primarily for travel on the public highways and is generally and commonly used to transport people and property over the public highways…”