Colorado shoppers will now pay “retail delivery fees” on orders from Amazon, DoorDash and others. Heres how it works.

Amazon and other retailers on July 1 began collecting a state fee on most delivery orders headed for Colorado doorsteps or mail boxes — a 27-cent charge that is supposed to be listed on receipts as “retail delivery fees.”

The new delivery fee was one of several that took effect in July in Colorado as part of a transportation funding bill approved by state lawmakers in 2021.

Here’s a look at the basics:

Which deliveries trigger the fee: The state says retailers, online marketplaces and services must charge the delivery fee on each order total if it meets two criteria: the order will be delivered to a Colorado address using a motor vehicle, and it includes at least one good that’s subject to the state sales or use tax. This includes restaurant delivery orders through services such as DoorDash, and it includes mail orders from a traditional retailer. But not groceries, so long as there are no taxable items in the order.

Multiple deliveries per order: The Colorado Department of Revenue’s guide says the fee must only be charged once per order, even if the order will be split into multiple deliveries.

Why the delivery fee exists: The legislation passed last year, SB21-260, is aimed at boosting revenue for Colorado road projects, along with transit and electric vehicle programs, by making more users of the state’s roads pay new kinds of fees. The new fees also affect ride-hailing services such as Lyft and Uber (27 cents), diesel fuel purchases (2 cents per gallon), car-share rentals lasting longer than 24 hours ($2 per day), and owners of electric and hybrid vehicles (the fees vary). Next April, a 2-cent-per-gallon tax on gasoline will take effect.

How much the fee will raise: The retail delivery fee is projected to raise $1.2 billion over the next decade, nearly a third of the total $3.8 billion estimate for the entire fee package.

Where that money goes: The 27-cent delivery fee — which is set to increase with inflation — is made up of several smaller fees devoted to specific purposes. The money will support state and local road and transit projects; bridges and tunnels; a state pollution-reduction enterprise in metro Denver and the northern Front Range; and three state enterprises focused on accelerating electric vehicle adoption.

Source: Read Full Article