Colorado Retail Delivery Fee

Overview 

Beginning on July 1, 2022, the State of Colorado implemented a new Retail Delivery Fee, which is applicable on all taxable deliveries by motor vehicle to a location in Colorado. Wholesale or other exempt sales are not subject to this fee. The Retail Delivery Fee amount is $0.27, per sale, where one or more items are subject to sales tax. 

The new fee should be charged to customers by the retailer. The retailer collects the fee and submits all fees on the sales tax return. Retailers that are required to collect the fee will file a separate Retail Delivery Fee Return (DR 1786) and pay the fee to the Colorado Department of Revenue.

This Retail Delivery Fee in Accounting Seed is supported based upon your sales tax solution. Click the appropriate link below:

• Avalara Sales Tax with Header Level Posting (HLP)
• Avalara Sales Tax with Line Level Posting (LLP)
• AS Native Tax with Header Level Posting (HLP)
• AS Native Tax with Line Level Posting (LLP)

Avalara Sales Tax with Header Level Posting (HLP)

1. Create a new GL Account for the Retail Delivery Fee Liability that is similar to the Sales Tax Liability GL Account.
   Note: For information on creating a GL Account, refer to the Create a New GL Account article.
2. Create a new Product specifically for this fee and select the new Retail Delivery Fee Liability GL Account as the Revenue GL Account.
   Note: For information on creating a Product, refer to the Set up Non-Inventoried Product article.
3. Assign the Avalara tax code of OF400000 to the new Retail Delivery Fee Product. This is the tax code that Avalara will use for the new Retail Delivery Fee.
   Note: For more information, refer to the Assign an Avalara Tax Code to a Product in Accounting Seed section of the Set up Avalara AvaTax Integration article.
4. Display a Billing that requires this new fee (includes at least one taxable Billing Line). Then, add the new Product to a Billing Line, with a Unit Price of $0.00.
   Note: Verify that the customer’s shipping address is in Colorado.
   
5. Click Calc Tax as normal to have Avalara calculate the tax amount.
   Note: Avalara will return $0.27 to the Tax Amount field on the Billing Line where the Retail Delivery Fee Product was selected.

When you create the PDF for the invoice, the Retail Delivery Fee displays as a separate line with the Tax Amount of $0.27.

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Avalara Sales Tax with Line Level Posting (LLP)

1. Create a new GL Account for the Retail Delivery Fee Liability that is similar to the Sales Tax Liability GL Account.
   Note: For information on creating a GL Account, refer to the Create a New GL Account article.
2. Create a new Product specifically for this fee and select the new Retail Delivery Fee Liability GL Account as the Revenue GL Account.
   Note: For information on creating a Product, refer to the Set up Non-Inventoried Product article.
3. Assign the Avalara tax code of OF400000 to the new Retail Delivery Fee Product. This is the tax code that Avalara will use for the new Retail Delivery Fee.
   Note: For more information, refer to the Assign an Avalara Tax Code to a Product in Accounting Seed section of the Set up Avalara AvaTax Integration article.
4. Display a Billing that requires this new fee (includes at least one taxable Billing Line). Then, add the new Product to a Billing Line, with a Unit Price of $0.00.
   Note: Verify that the customer’s shipping address is in Colorado.
   
5. Click Calc Tax as normal to have Avalara calculate the tax amount.
   Note: Avalara will return $0.27 to the Tax Amount field on the Billing Line where the Retail Delivery Fee Product was selected.

When you create the PDF for the invoice, currently the Retail Delivery Fee line displays with a $0.00 amount and the $0.27 is included in the Avalara Tax Line. We are working on a new PDF file that will update this information correctly to display the $0.27 on the Retail Delivery Fee line.

Important: This article will be updated when the new PDF file is available.

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AS Native Sales Tax with Header Level Posting (HLP)

1. Create a new GL Account for the Retail Delivery Fee Liability that is similar to the Sales Tax Liability GL Account.
   Note: For information on creating a GL Account, refer to the Create a New GL Account article.
   
2. Create a new Product specifically for this fee and select the new Retail Delivery Fee Liability GL Account as the Revenue GL Account.
   Note: For information on creating a Product, refer to the Set up Non-Inventoried Product article.
   Note: Do not assign a Tax Group to the new Product.
3. Display a Billing that requires this new fee (includes at least one taxable Billing Line). Then, add the new Product to a Billing Line, with a Unit Price of $0.27.
   Note: Verify that the customer’s shipping address is in Colorado.

When you create the PDF for the invoice, the Retail Delivery Fee displays as a separate line with the Unit Price of $0.27.

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AS Native Sales Tax with Line Level Posting (LLP)

1. Create a new GL Account for the Retail Delivery Fee Liability that is similar to the Sales Tax Liability GL Account.
   Note: For information on creating a GL Account, refer to the Create a New GL Account article.
   
2. Create a new Product specifically for this fee and select the new Retail Delivery Fee Liability GL Account as the Revenue GL Account. Select Tax Exempt Product from the Tax Type drop-down list.
   Note: For information on creating a Product, refer to the Set up Non-Inventoried Product article.
3. Display a Billing that requires this new fee (includes at least one taxable Billing Line). Then, add the new Product to a Billing Line, with a Unit Price of $0.27.
   Note: Verify that the customer’s shipping address is in Colorado.

When you create the PDF for the invoice, the Retail Delivery Fee displays as a separate line with the Unit Price of $0.27.

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