Starting July 1st, 2023, the State of Colorado has required that certain retailers selling to addresses in Colorado collect from their customers a Retail Delivery Fee for most deliveries. As of July, 2023 this fee is $0.28 per shipment. This fee is not explicitly defined as a tax but acts as a tax in terms of how it is collected and remitted to the Colorado Department of Revenue.
ShipperHQ is not a tax calculation provider and we are not providing tax or legal advice related to the Colorado Retail Delivery Fee. However, our Shipping Rules functionality can be configured to allow merchants to collect the $0.28 Retail Delivery Fee when required by surcharging shipping rates by this amount.
For more information on the Colorado Retail Delivery Fee consult with tax or accounting experts and refer to the Colorado Department of Revenue’s Retail Delivery Fee information.
Adding Retail Delivery Fee as a Surcharge
The following steps can be used to add a $0.28 surcharge to all shipments to Colorado.
- Within your ShipperHQ dashboard click on “Shipping Rules” in the left-hand navbar
- Click the “+ New” button at the top of the page to create a new Shipping Rule
- Select “Surcharge Rates” as the action to perform
- Set “Apply Surcharge as a” to “Flat Rate” and enter “0.28” in the following field. Then:
- If you are using the Multi-Origin Shipping Advanced Feature, set “Apply This Rate To” to “The Cart”
- If you are using the Multi-Origin Shipping Advanced Feature, set “Apply This Rate To” to “Each Shipment in the Cart”
- Click “Continue”
- Select the shipping methods you use to ship to Colorado (or click “Select All” to select all shipping methods) and click “Continue”
- Choose “Shipping Zones” as the condition under which the rule should apply and click “Continue”
- Set “Surcharge Rates when…” to “Shipping Zones Include”
- Click “I want to create a new Shipping Zone”
- Enter the name of your new Shipping Zone (e.g. “Colorado”)
- Under “Countries” choose “United States”
- Under “For States/Regions” choose “Including”
- Under “State/Regions” choose “Colorado”
- Click “Continue” to return to the “Surcharge Rates when…” window and click “Continue” again
- Click Finish
- Click the Edit (pencil) icon on the newly created Shipping Rule (called “Surcharge Rates” by default)
- Enter an indicative name (e.g. “Colorado Retail Delivery Fee”) in the “Shipping Rule Name” field
- Click “Save” at the bottom of the page
With this Shipping Rule configured, orders shipping to Colorado will have a surcharge of $0.28 added to the shipping rate.
Handling Tax Exempt Products
Shipments containing only non-taxed products may not be required to include the Retail Delivery Fee (refer to the Colorado Department of Revenue’s Retail Delivery Fee information to confirm if this applies to your products). To identify these shipments, a Shipping Group can be used to identify these products. The Shipping Rule used to apply the Retail Delivery Fee can then be modified to not apply if the cart contains only products assigned to this Shipping Group.
Identifying the Retail Delivery Fee to Customers
Using a Shipping Rule as described above to add the Retail Delivery Fee to orders shipping to Colorado will only change the amount charged to customers. It will not indicate to customers that their order includes the Retail Delivery Fee. To ensure this is visible to customers, you may need to customize your checkout theming (see instructions available from your eCommerce platform to customize checkout). Alternately, you can use ShipperHQ’s Rate Shopping and Custom Method Naming Advanced Feature to change the name shown to customers at checkout.