Colorado Senate Bill 21-260 Retail Delivery Fee

[humblehomesteadco]

Colorado Senate Bill 21-260 Retail Delivery Fee begins July 1, 2022

Will eBay collect and submit this tax on behalf of sellers in Colorado?

Retail Delivery Fee (RDF)

Do you sell taxable items that will be delivered by a motor vehicle to a location in Colorado

(including deliveries made by a third-party)?

If the answer is yes, this impacts you!

You will be required to charge, collect, and remit a new fee to the Colorado Department of Revenue (CDOR).

Highlights

• Begins July 1, 2022
• Applies to all retail sales delivered by a motor vehicle to a location in Colorado
• Includes third-party deliveries
• $0.27 per retail sale for delivery
• Charged to the purchaser
• Collected by the retailer and remitted to CDOR
• Follows sales tax filing frequencies and due dates
• Filed on a separate return, form DR 1786

Those impacted

• Retailers licensed to make sales in Colorado 
• Examples include, but are not limited to:
• Restaurants that deliver
• Grocery Stores that deliver
• Flower delivery services
• Sales that require delivery 
• Furniture
• Appliances
• Electronics
• Online stores that ship orders
• Business-to-business retail sales (excluding wholesale sales)

Transactions subject to the Retail Delivery Fee (RDF)

• All retail sales that:
• Have at least one item delivered by motor vehicle; and
• Include at least one item that is subject to Colorado state sales tax

[the_fancy_fox]

The other kick in this is we sellers get to pay FVF on that amount. It’s small now but later down the road? Bet it won’t be.

[zero29zero]

If this bill goes through and other states follow suit ebay is in great shape

They will find a way to monetize the system on both ends & sellers will pay, as always

[valueaddedresource]

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@zero29zero wrote:

If this bill goes through and other states follow suit ebay is in great shape

They will find a way to monetize the system on both ends & sellers will pay, as always

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@zero29zero  eBay already has a way to monetize it, the same way they monetize collecting and remitting sales tax as a marketplace facilitator - they apply the full FVF fee and as of tomorrow full Promoted Listings ad fee on the total amount of the order, including tax.

[zero29zero]

Oh NO, don't get me started. I was baked & broiled on another thread when I insisted that I pay more than 12.9% to peddle my trinkets here

Think I have the solution now but I wouldn't bump up that thread for love nor money, I'm skeered

[7606dennis]

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@the_fancy_fox wrote:

Personally, I don’t live in Colorado. And they can’t force me to collect this fee for them.  If they want to go after ebay to do so…… whatever.

Have to love the money grab.  Give a inch (sales tax collection) and they are going for the mile. It won’t stop with just this.

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That may be true but they can prohibit you from doing business within their state.

[stephenmorgan]

Good observation. 

Currently the USPS does not collect taxes for the states so there would have to be some sort of an agreement and I think that would be difficult to get them to go along with it.

[valueaddedresource]

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@the_fancy_fox wrote:

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@valueaddedresource wrote:

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@the_fancy_fox wrote:

Interesting they say online stores. I would assume that means online stores that reside in the state.

considering what it took to get sales tax. Collected, this won’t happen to out of state vendors for a while, if ever.

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@the_fancy_fox  it would mean all online stores but as I said previously, for orders placed through eBay, eBay will be responsible to collect and remit it as the marketplace facilitator, just like they currently do for regular sales tax.

The only out of state sellers who need to worry about this would presumably be if you have a direct website where you do enough sales into Colorado to meet the threshold for nexus and thus are required to collect and remit tax to Colorado for those sales - but if you're in that boat, you (should) already be collecting and remitting the regular sales tax so this will just need to be added into that.

TLDR: If you sell exclusively on eBay, you do not need to worry about this.

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I believe the original intend was collecting sales tax, not a delivery fee. 

seems to be a grey area. Like what’s to stop them from imposing every goofy fee they can dream up?  

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@the_fancy_fox I don't  disagree that it could be a grey area, which is likely why there's at least one lawsuit about it already. And that's your answer to what's to stop them - realistically the way to stop them would be legal challenges likely brought by people within the state and who knows, it could even go to the Supreme Court eventually.

That's exactly how we got where we are today with the sales tax issue - South Dakota v Wayfair.

[deltilogical]

"Have at least one item delivered by motor vehicle; "

How would this be determined in advance?   

Not sure what it looks like in the rest of the country day to day but in Manhattan the actual delivery will be by a person of color pulling a cart piled full of packages.  A delivery van will disperse the items from a couple of occupied public parking spaces- does that count as 'delivered by motor vehicle'.   I assume parts of Denver run like NYC's concentrated population.

they will probably give the drone delivery tax credits.

[lesegouts]

If ebay does not incorporate this fee in their software like the sales tax is done, how will CO even know, much less enforce?

It is absurd.

[donsdetour]

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@lesegouts wrote:

If ebay does not incorporate this fee in their software like the sales tax is done, how will CO even know, much less enforce?

It is absurd.

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The absurdity is that they tried this at all: Not a tax per say but a fee........

Targeted at retail; and of course the market place facilitator...

Man what it does to food delivery services is just plain crazy...

Time will tell on this one. Worth watching I believe..

Next they will target trucking going though the state????  It just a fee to maintain da roads you see. Its not a tax per say.... Right......

[stephenmorgan]

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@lesegouts wrote:

If ebay does not incorporate this fee in their software like the sales tax is done, how will CO even know, much less enforce?

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Similar could be said for any fees eBay collects for any government entities.  

eBay collects the fees but you have no idea if the fees are actually remitted to the various governments. 

Until there is an audit or perhaps a whistle blower proving otherwise you have to accept on faith that they are following the law as required.

[monroe67]

"The other kick in this is we sellers get to pay FVF on that amount."

Assuming my calculator is correct, 12.9% of 27 cents is $0.03483.  
That would be either three cents or four cents, depending on whether that number is rounded up or down.  

Again, IMO, if I have to let eBay keep Four Cents in payment for their employees to collect those 27 cents and send them to Colorado along with the proper forms and accurate calculations -- meaning that I do not have to do it -- I consider those Four Cents are well-earned by eBay and well-spent by me.  

[velvet@ebay]

Hi all! I just received the following response:

Thanks for the question. Our tax team is aware of these changes and have them included in our roadmap. Conveniently for sellers the liability and effort falls on eBay as the retailer and no changes will need to be made on the seller’s end.

[valueaddedresource]

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velvet@ebay wrote:

Hi all! I just received the following response:

Thanks for the question. Our tax team is aware of these changes and have them included in our roadmap. Conveniently for sellers the liability and effort falls on eBay as the retailer and no changes will need to be made on the seller’s end.

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Thanks for that confirmation velvet@ebay !

[paulhua3]

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@katzrul15 wrote:

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@sextons-sweet-deals wrote:

you should be able to select the states that you're willing to ship to in your listings

I looked up this Colorado delivery tax on-line.  The article has most frequent questions with answers. Still a little fuzzy until eBay posts something, but questions 8, 10, & 13 stick out the most to me. 

Retail Delivery Fee | Department of Revenue - Taxation (colorado.gov)

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You can only exclude HI and Alaska.  You cannot exclude Colorado.

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Maybe eBay will allow us to ban deliveries above a certain altitude.