{"id":10465,"date":"2022-06-09T15:28:33","date_gmt":"2022-06-09T15:28:33","guid":{"rendered":"https:\/\/taxops.com\/?p=10465"},"modified":"2022-06-09T15:30:12","modified_gmt":"2022-06-09T15:30:12","slug":"colorados-delivery-fee-drops-july-1-2022","status":"publish","type":"post","link":"https:\/\/taxops.com\/colorados-delivery-fee-drops-july-1-2022\/","title":{"rendered":"Colorado&#8217;s Delivery Fee Drops July 1, 2022\u00a0"},"content":{"rendered":"\n<div style=\"height:53px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<figure class=\"wp-block-gallery has-nested-images columns-default is-cropped wp-block-gallery-1 is-layout-flex wp-block-gallery-is-layout-flex\">\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"536\" data-id=\"10467\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/taxops.com\/wp-content\/uploads\/2022\/06\/Colorado-New-Delivery-Fee-1-1024x536.png\" alt=\"Wrapped packages\" class=\"wp-image-10467 lazyload\" data-srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2022\/06\/Colorado-New-Delivery-Fee-1-1024x536.png 1024w, https:\/\/taxops.com\/wp-content\/uploads\/2022\/06\/Colorado-New-Delivery-Fee-1-980x513.png 980w, https:\/\/taxops.com\/wp-content\/uploads\/2022\/06\/Colorado-New-Delivery-Fee-1-480x251.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1024px, 100vw\" \/><noscript><img decoding=\"async\" width=\"1024\" height=\"536\" data-id=\"10467\" src=\"https:\/\/taxops.com\/wp-content\/uploads\/2022\/06\/Colorado-New-Delivery-Fee-1-1024x536.png\" alt=\"Wrapped packages\" class=\"wp-image-10467 lazyload\" srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2022\/06\/Colorado-New-Delivery-Fee-1-1024x536.png 1024w, https:\/\/taxops.com\/wp-content\/uploads\/2022\/06\/Colorado-New-Delivery-Fee-1-980x513.png 980w, https:\/\/taxops.com\/wp-content\/uploads\/2022\/06\/Colorado-New-Delivery-Fee-1-480x251.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1024px, 100vw\" \/><\/noscript><\/figure>\n<\/figure>\n\n\n\n<div style=\"height:53px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p><em><em><em><em><em><em>Confusion is expected as the new Colorado retail delivery fee kicks in, requiring all sellers to adjust their invoicing process.<\/em>\u00a0<\/em><\/em><\/em><\/em><\/em><\/p><\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p><\/p><\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">By <a href=\"https:\/\/www.linkedin.com\/in\/judyvorndran\/\" target=\"_blank\" rel=\"noreferrer noopener\" title=\"\">Judy Vorndran<\/a> and <a href=\"https:\/\/taxops.com\/connie-zoerink\/\" target=\"_blank\" rel=\"noreferrer noopener\" title=\"Connie Zoerink\">Connie Zoerink<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Effective July 1, 2022, Colorado will impose a retail delivery fee on all deliveries by \u201cmotor vehicle\u201d to a location in Colorado with at least one item of tangible personal property subject to state sales or use tax.\u202fAccording to the <a href=\"https:\/\/tax.colorado.gov\/retail-delivery-fee\" target=\"_blank\" rel=\"noreferrer noopener\">State<\/a> Department of Revenue site:&nbsp;&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-group is-layout-flow wp-block-group-is-layout-flow\">\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>The retailer or marketplace facilitator that collects the sales or use tax on the tangible personal property sold and delivered, including delivery by a third party, is liable to collect and remit the retail delivery fee. Deliveries include when any taxable goods are mailed, shipped, or otherwise delivered by motor vehicle to a purchaser in Colorado.\u00a0<\/p><p>The retail delivery fee is due at the same time as your sales tax return. Returns are generally filed on a monthly basis and must be filed on or before the 20th day of the month following each reporting period. Retailers permitted to file state sales tax returns quarterly, annually, or another basis will file the retail delivery fee return on the same schedule.\u00a0<\/p><p>The retail delivery fee will be reported and paid on a new return, the DR 1786 form. The retail delivery fee is collected state-wide, does not need to be separated by jurisdiction, and is calculated per sale. The retail delivery fee is made up of six different fees. Review the full statement and the rates via the link below.\u00a0<\/p><\/blockquote>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Takeaway&nbsp;<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Some of the Colorado home rules \u2013 of which there are 70 \u2013 are as of this writing taking the position that the Colorado delivery fee is part of the purchase price and is considered taxable. Thus, there are some implications that the State did not give thought to when they enacted the delivery fee, which may need further consideration.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Denver, the largest home rule, is considering taxing the fee as is Fort Collins. So, even if the fee is stated separately, cities are wondering why it should not be included in the purchase price, and subject to tax, given that it is mandatory.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some officials acknowledge, however, that before including the fee in the purchase price, a thorough analysis would be necessary to consider whether a customer has the ability to obtain the taxable item without paying that particular charge&#8211;in this case the delivery fee&#8211;on the invoice.\u202fIt doesn\u2019t appear that this fee is associated with a specific service by the vendor but rather is a mandatory charge imposed by the State.\u202f&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Denver does not currently have an exemption in its municipal code for this fee. As it appears, the fee would likely be taxable in Denver.\u202fOther home rule cities have similar municipal codes, and they would likely follow Denver\u2019s direction on taxing these mandatory delivery fees imposed by the State of Colorado.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As of this writing, sales tax automation providers are not adding these returns to their return filing calendars. Those biz-taxpayers with over the road tangible personal property deliveries must figure out how they are going to charge this fee for each applicable sale to Colorado customers, get registered and file. (Note that registration is automatic for those taxpayers who already have a sales tax account with the State.) The simplest way is to add a line item to all items delivered to Colorado for the fee on invoices ($0.27). This fee will require a separate return as well.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">TaxOps will be making comments during an upcoming stakeholder meeting with the Colorado Department of Revenue. If you have comments and wish to help us by going on the record sharing how this fee will affect your company, please let us know at <a href=\"mailto:info@taxops.com\" target=\"_blank\" rel=\"noreferrer noopener\">info@taxops.com<\/a>.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Source: <a href=\"https:\/\/tax.colorado.gov\/retail-delivery-fee\" target=\"_blank\" rel=\"noreferrer noopener\" title=\"Colorado Delivery Fee\">Colorado Retail Delivery Fee<\/a> \u00a0<\/p>\n\n\n\n<div style=\"height:50px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/taxops.com\/contact\/\" target=\"_blank\" rel=\"noreferrer noopener\">Let&#8217;s Talk Tax<\/a><\/div>\n<\/div>\n\n\n\n<div style=\"height:47px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">More Tax News<\/h3>\n\n\n<ul class=\"wp-block-latest-posts__list wp-block-latest-posts\"><li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/auditor-independence-in-the-age-of-private-equity\/\">Auditor Independence in the Age of Private Equity: What CFOs Need to Know<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/r-d-credits-for-software-companies\/\">R&amp;D Credits for Software Companies: Scrum Teams, Qualifiers, and Section 174 After OBBBA<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/section-174-decoupling-what-tax-pros-need-to-know-state-by-state\/\">Section 174 Decoupling: What Tax Pros Need To Know State By State<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/sean-espy-new-partner\/\">TaxOps Welcomes Sean Espy as Partner, Tax Minimization<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/state-nexus-demystified-navigating-tax-compliance-after-wayfair-episode-1-2\/\">Your Tax Footprint Is Probably Bigger Than You Think: What Finance Leaders Need to Know About State Nexus<\/a><\/li>\n<\/ul>\n\n\n<div style=\"height:47px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/taxops.com\/contact\/#subscribe\" target=\"_blank\" rel=\"noreferrer noopener\">Subscribe to Tax News<\/a><\/div>\n<\/div>\n\n\n\n<div style=\"height:47px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Confusion is expected as the new Colorado retail delivery fee kicks in, requiring all sellers to adjust their invoicing process.\u00a0 By Judy Vorndran and Connie Zoerink Effective July 1, 2022, Colorado will impose a retail delivery fee on all deliveries by \u201cmotor vehicle\u201d to a location in Colorado with at least one item of tangible [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":10467,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"<!-- wp:spacer {\"height\":\"53px\"} -->\n<div style=\"height:53px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:gallery {\"linkTo\":\"none\"} -->\n<figure class=\"wp-block-gallery has-nested-images columns-default is-cropped\"><!-- wp:image {\"id\":10182,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https:\/\/taxops.com\/wp-content\/uploads\/2022\/04\/Texas-High-Court-Clarifies-Service-Receipt-Apportionment-1-1024x536.png\" alt=\"\" class=\"wp-image-10182\"\/><\/figure>\n<!-- \/wp:image --><\/figure>\n<!-- \/wp:gallery -->\n\n<!-- wp:spacer {\"height\":\"53px\"} -->\n<div style=\"height:53px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p><em><em>The Texas Supreme Court has ruled in favor of apportioning service receipts to the location of personnel or equipment, a position providing clarity to taxpayers on whether to source receipts from services performed versus where customers are at.<\/em>&nbsp;<\/em><\/p><\/blockquote>\n<!-- \/wp:quote -->\n\n<!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><p><\/p><\/blockquote>\n<!-- \/wp:quote -->\n\n<!-- wp:paragraph -->\n<p>By <a href=\"https:\/\/taxops.com\/tram-le\/\" target=\"_blank\" rel=\"noreferrer noopener\" title=\"Tram Le\">Tram Le<\/a> <\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>On March 25, 2022, the Texas Supreme Court held in favor of the taxpayer that services revenue is apportioned to the location where services are performed, consistent with Texas law.<sup>1<\/sup> The Court found that the performance of service is located where the taxpayer\u2019s personnel or equipment is physically doing useful work for the customer.&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The case involves Sirius XM (Sirius XM Radio, Inc. v. Hegar, Tx. Sup. Ct. No. 20-0462 (3\/25\/22)), whose headquarters, transmission equipment and production studios used in providing a subscription-based satellite radio service are largely located outside of Texas. In the 2010 and 2011 tax years, Sirius XM apportioned tax based on costs of activities in Texas and outside of Texas. Under Texas rules, service revenue is apportioned to Texas based on the \u201cfair value of the services\u201d rendered in Texas where services are performed in more than one state.<sup>2<\/sup>&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>For those tax years, the Texas Comptroller adjusted on audit to base the tax on the percentage of Sirius XM\u2019s Texas subscribers. The Comptroller argued that service revenue is sourced to Texas if the \u201creceipt-producing, end-product act\u201d takes place in Texas. In this case, such an act was considered the decryption of the satellite network and enabling of each subscriber\u2019s radio to receive Sirius XM\u2019s signal. However, Sirius XM argued that its services \u2013 the production and broadcasting of radio content \u2013 was mainly performed outside of Texas.&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The Texas Supreme Court ultimately agreed that Sirius XM was providing satellite radio content and those services are performed in Texas if the labor employed in that service is doing the work in Texas. This constitues a natural reading of the law, which requires taxes due \u201cwhere service [is] performed in this state.\u201d This rejects the Comptroller premise of service taking place at the customer location. The Court also rejected the use of the \u201creceipt-producing, end-product\u201d test to determine where a service is being performed.&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Although the Court ruled in favor of the taxpayer, the case was remanded to the Appellate court for further review of Sirius XM\u2019s cost of performing services and evidence to support its \u201cfair value of services\u201d performed in Texas.&nbsp;&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>The Texas Supreme Court opinion provides clarification in apportioning service revenue in Texas and determining whether services are performed in the state. Taxpayers doing business in Texas should carefully review business operations, nature of services, i.e., properly characterizing the services provided to customers and location of equipment, facilities, and personnel to properly apportion revenue.&nbsp;&nbsp;&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>In addition, if services are being performed in Texas and outside of Texas, taxpayers must properly evaluate methods of determining the fair value of services and maintain sufficient evidence to support what revenue is apportioned to Texas. Contact a TaxOps advisor is you need assistance assessing nexus and taxability in the state of Texas and everywhere you do business.&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>Tram Le is a member of the SALTovation team at TaxOps and an adjunct professor at the University of Texas at Arlington. She writes about hot topics in state and local tax affecting business operations and growth strategies and the Spreading SALTovation column for Tax Notes.&nbsp;Reach out to Tram at <a href=\"mailto:tle@taxops.com\" target=\"_blank\" rel=\"noreferrer noopener\" title=\"Tram Le\">tle@taxops.com<\/a>.&nbsp;&nbsp;<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:spacer {\"height\":\"53px\"} -->\n<div style=\"height:53px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:buttons -->\n<div class=\"wp-block-buttons\"><!-- wp:button -->\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/taxops.com\/contact\/\" target=\"_blank\" rel=\"noreferrer noopener\">Let's Talk Tax<\/a><\/div>\n<!-- \/wp:button --><\/div>\n<!-- \/wp:buttons -->\n\n<!-- wp:spacer {\"height\":\"47px\"} -->\n<div style=\"height:47px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3>More Tax News<\/h3>\n<!-- \/wp:heading -->\n\n<!-- wp:latest-posts \/-->\n\n<!-- wp:spacer {\"height\":\"47px\"} -->\n<div style=\"height:47px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:buttons -->\n<div class=\"wp-block-buttons\"><!-- wp:button -->\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/taxops.com\/contact\/#subscribe\" target=\"_blank\" rel=\"noreferrer noopener\">Subscribe to Tax News<\/a><\/div>\n<!-- \/wp:button --><\/div>\n<!-- \/wp:buttons -->\n\n<!-- wp:spacer {\"height\":\"47px\"} -->\n<div style=\"height:47px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->","_et_gb_content_width":"","spt_transcript":"","footnotes":""},"categories":[229,226],"tags":[974,252,967,284,12,126,977,975,978,265,968,913,976,269,19,101,80,964],"class_list":["post-10465","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-state-and-local","category-tax-news","tag-27-cents","tag-accountant","tag-amazon-web-services","tag-cfo","tag-colorado","tag-cpa","tag-deliveries","tag-delivery-fee","tag-delivery-tax","tag-finance-professional","tag-mainframe-access","tag-new-tax","tag-retail-delivery","tag-returns","tag-sales-tax","tag-state-tax","tag-tax-provider","tag-tax-service"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/taxops.com\/wp-content\/uploads\/2022\/06\/Colorado-New-Delivery-Fee-1.png","_links":{"self":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/10465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/comments?post=10465"}],"version-history":[{"count":1,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/10465\/revisions"}],"predecessor-version":[{"id":10468,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/10465\/revisions\/10468"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/media\/10467"}],"wp:attachment":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/media?parent=10465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/categories?post=10465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/tags?post=10465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}