Effective July 1st, 2022, the state of Colorado will impose a $0.27 Retail Delivery Fee (RDF) 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 (source).
CIMcloud now has a task in our product development backlog (roadmap) to build a new feature that addresses calculating and collecting this fee on applicable Colorado orders. This request will likely fall within Bucket C: Part of a Major Release in the Next Two Years. We will not have our core product updated by the time this new tax takes effect.
Below are a few options you can consider if this new fee/tax applies to you.
If your site is integrated with Avalara, they have a detailed overview of Colorado’s RDF, with methods to implement it within your ERP system in a recent help center article.
What are my options to implement this into my website?
- Increase shipping method total calculations
- Duplicate shipping methods to filter by state, with one set shipping to Colorado, and the rest shipping to all other states
- For methods shipping to colorado, add a shipping multiplier
- The multiplier can be used to account for the additional $0.27 Colorado RDF
- Note: The shipping multiplier is percentage base, so may not be 100% accurate for the RDF amount
- Contact Professional Services for an estimate to implement a custom solution based off your requirements
- Please include any interface changes and/or ERP order import changes (e.g. MISC codes needed to hold RDF on detail lines).
- Note: You may want to run a comparison of our estimated project cost to the expected Colorado RDF amount due. From our internal audit, we found that most customer’s will likely owe far less (in new taxes / fess) than they may expect, and in most cases, far less than the cost of implementing & maintaining a custom solution.
- Wait for the eventual product release & update your site to the latest version
- After CIMcloud implements a solution into our core product (timeline TBD), you can add it to your site by updating to the current version and taking any setup / configuration steps required. You can follow our release notes (communicated via the help center, on webinars, and via email announcements) to know when support has been added to the core product.
What happens if I am unable to collect these fees by July 1st, 2022?
We [State of Colorado] understand that some retailers may have difficulty implementing this new retail delivery fee program by July 1. For those retailers who are making a good-faith effort to comply with these new requirements, we plan to be generous in granting requests to waive late filing and payment penalties and interest. However, the Department is not permitted to waive the retail delivery fee itself. Because you are liable for any uncollected fees, we encourage you to begin collecting the fees on applicable sales as soon as possible to limit your liability. (source)