Update: As of July 1, 2026, the Colorado Retail Delivery Fee has been increased to $.31 on retail deliveries into the state.
When it comes to sales tax, Colorado is one of the most difficult states not only because of regular state, county, city and special district taxes but also because of home rule cities (which means each has its own definition, tax rates, taxability, registration and filing portal) and now the Colorado Retail Delivery Fee. Sounds complicated, right? Well, you're in the right place. As ecommerce accountants, we work with this stuff every day, and we're here to make it easier for you.
Key things you need to know about the Colorado retail delivery fee
Starting on July 1st, 2022, Colorado introduced a fee on retail deliveries into the state, requiring retailers to collect and remit a retail delivery fee if the transaction meets the following criteria:
- The delivery contains at least one item of tangible personal property, and is subject to state sales or use tax.
- The products are delivered to Colorado customers by motor vehicle (i.e. road transportation).
The fee started at $.27 but has increased to $.31 as of July 1, 2026.
- $.27 – July 1, 2022 – June 30, 2023
- $.28 – July 1, 2023 – June 30, 2024
- $.29 – July 1, 2024 – June 30, 2025
- $.28 - July 1, 2025 – June 30, 2026 (a slight decrease)
- $.31 - July 1, 2026 – June 30, 2027 (current rate, and the largest single-year jump since the fee began)
Retail Delivery Fee is not subject to state sales tax or state-administered local sales tax, but may be subject to sales tax in self-collecting home rule jurisdictions.
If you want to know more about sales tax for home rule jurisdictions, here is a video explaining how sales tax works in the home rule jurisdictions.
Important details about the retail delivery fee to keep in mind
- The fee is not refundable, even if the items are returned.
- The fee still applies to purchases with free shipping, as long as at least one item of tangible personal property is included.
Which retailers are liable for this fee?
You don't need to worry about it unless you DON'T meet these criteria, which qualify you for an exemption:
- A business whose retail sales of tangible personal property or taxable services in Colorado totaled less than $500K in the previous year.
- A business that is not liable for sales tax because they have no physical presence in Colorado.
Also, certain categories are exempt, regardless of business size. These include food, drugs, and (since 2025) fuel and road construction materials.
Note: The small business exemption threshold for the Retail Delivery Fee is far higher than the economic threshold for sales tax ($100K). Don't get them confused. Another thing to note is that you can choose to pay the fee yourself instead of adding it to the checkout process. This has been an issue because the software that retailers use often does not allow an extra line item to be added.
How does this affect sales made through a marketplace?
This is a really common question. Basically, who is responsible for collecting and remitting this fee when sales are made through a marketplace?
We found this specific guidance on who liable for the retail delivery fee on the Colorado Department of Revenue website: “If a retail sale is made through a marketplace and the marketplace facilitator (such as Amazon, eBay, etc.) is required to collect sales tax from the purchaser, the marketplace facilitator is also liable for the retail delivery fee if the purchased item is delivered by motor vehicle. A marketplace seller who is not liable for sales tax on the sale is also not liable for the retail delivery fee.” So, for those of you selling on Amazon or Etsy, etc., this definitely makes things easier for you.
How to get a retail delivery fee account
If you already file sales & use tax in Colorado, you must open a separate Retail Delivery Fee account with the Department of Revenue.
Things to note:
- The form for filing the Retail Delivery Fee is Form 1786. You can file online or by paper. The form is pretty straightforward, but feel free to reach out to us if you have any questions.
- This fee is NOT the same thing as sales tax, but filings are due at the same time as your sales tax return.
- For example, if you are a monthly filer for sales & use tax in Colorado, you will also be a monthly filer for the Colorado retail delivery fee reporting and remittance.
- There are penalties and interests for late filing.
- The Retail Delivery Fee applies state-wide and does not need to be separated by jurisdiction.
How does the Colorado retail delivery fee compare to the Minnesota retail delivery fee?
There are a couple of key differences:
- Colorado's fee is $.31 (for now) while Minnesota's RDF is $.50.
- Colorado's fee applies to any retail transaction with at least 1 item of taxable, tangible personal property while Minnesota's is on retail transactions over $100.
- Colorado's sales threshold for sellers is $500K in the previous calendar year while Minnesota's is $1M.
For more information, read our guide to Minnesota's Retail Delivery Fee.
Note: Colorado and Minnesota are unlikely to stay alone, since as at the time of this writing, fee legislation is active in over 10 other states.
Frequently asked questions
What is Colorado's current Retail Delivery Fee rate?
$0.31 per delivery, effective July 1, 2026. The rate is set annually and adjusted for inflation, it decreased slightly to $0.28 in July 2025 before rising again this year.
Who has to collect the Colorado Retail Delivery Fee?
Retailers with more than $500K in Colorado retail sales in the prior year, or a physical presence in the state. Businesses under that threshold, or with no physical presence and no sales tax liability, are exempt.
Do I owe the fee if I sell through Amazon or another marketplace?
If the marketplace facilitator is required to collect sales tax on the sale, they're also responsible for the Retail Delivery Fee. You may still owe it on any direct sales through your own site that the marketplace doesn't touch.
How is the Retail Delivery Fee different from sales tax?
It's a separate fee, not a tax, filed using Form 1786 rather than your standard sales tax return, though it's due on the same schedule and frequency as your sales tax filings. It's also not itself subject to state sales tax, though some home-rule cities may treat it differently.
Is the Retail Delivery Fee refundable if a customer returns their order?
No. The fee is non-refundable even if the entire order is returned.
Are other states adopting similar delivery fees?
Yes. Minnesota already has its own version, and as of 2026 more than ten other states, including Maryland, New York, and Washington, have introduced or debated similar delivery fee legislation.
Get ahead of Colorado’s changing fee structure
Between annual rate changes, home rule complexity, and marketplace exceptions, Colorado's Retail Delivery Fee is easy to get wrong. We can help however much support you need:
- Consultation: Get your specific questions answered by a sales tax expert.
- Sales Tax Risk Assessment: A free assessment to help you figure out where you stand and what you need to do next.
- Fully Managed: hand the whole thing off to our team.
