@somanypcs wrote:
eBay is still lumping the $.27 Colorado delivery fee in the sales tax on the order. A sale today shows:
What your buyer paid
Item subtotal $0.25
Shipping $0.90
Sales tax* $0.38
The Colorado Sales tax is $.11 and the Colorado retail deliver fee is $.27 and should be listed separately.
This was a sale to a Denver address, and online it says: "May 8, 2023 · Cities that exempt the retail delivery fee include Aurora, Denver, and Loveland." so this fee should NOT have been charged.
"On May 4, 2023, Colorado Governor Jared Polis signed legislation that creates an exemption from the state’s 27-cent Retail Delivery Fee (RDF) for businesses with retail sales of $500,000 or less in the prior calendar year," so this fee should NOT have been charged as my business qualifies for this small business exemption.
@somanypcs the law says "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."
So just like regular sales tax has to be collected because eBay as the marketplace facilitator has sales that exceed the nexus threshold, the delivery fee also has to be collected because eBay as the marketplace facilitator has sales that exceed that threshold.
If you as a small business have your own direct website and you don't have over $500,000 in sales in a year, then yes, that exemption would apply to those sales, but for sales through eBay It has nothing to do with any sellers' individual business or annual revenue, just as the sales tax doesn't.
As for Denver and other cities passing exemptions, that does not mean sales to those cities are exempt from this fee.
The fee is assessed at the state level and paid to the state, cities cannot override that. However, the CO home rule would allow cities to collect tax on the fee (it's confusing but basically it would be a tax on a tax).
These city "exemptions" just mean the city has decided they will not be including the delivery fee in the calculation for local sales tax.
https://www.avalara.com/blog/en/north-america/2022/10/what-you-need-to-know-about-the-colorado-retai...
Home rule sales taxes may apply to the retail delivery fee
One question in need of an answer when the retail delivery fee took effect was whether it was subject to sales tax in home rule cities. Colorado state sales tax doesn’t apply to the fee, but the department understood that local sales tax could apply to the fee in some home rule jurisdictions. We now know more.
As of September 23, 2022, nearly 30 home rule jurisdictions have confirmed that the retail delivery is subject to local sales taxes. These include Boulder, Castle Pines, and Sheridan. Some of these jurisdictions are working toward exempting the fee; these include Fort Collins, Greeley, and Littleton.
About 25 home rule jurisdictions have confirmed the retail delivery fee is exempt. These include the city and county of Denver, Loveland, and Vail.
Again, that does not mean the delivery fee will not still have to be collected and remitted to the state, it just means those cities will not be applying their local tax to the fee amount - though it's anyone's guess as to whether eBay is calculating that correctly.
So unfortunately no, your sales should not be exempt from the fee, though I do still believe eBay is supposed to be listing it separately from the tax.
