Colorado Retail Delivery Fee

Hosts & Guests

Meredith Smith, State and Local Tax Senior Manager

Connie Zoerink, State and Local Tax Director


Colorado Retail Delivery Fee

[00:00:00] Introduction: Welcome to SALTovation. The SALTovation show is a podcast series featuring the leading voices in SALT, where we talk about the issues and strategies to help you make sense of state and local tax.

[00:00:26] Meredith Smith: Hi everyone. This is Connie and Meredith with the SALTovation team. We just wanted to follow up on, you know, a conversation that we had recorded pre-Colorado Department of Revenue work group meeting. It is Friday, June 24th, shortly 24 hours after the work group ended. So. Connie and I just kind of wanted to throw out some key takeaways that we learned in that meeting that was attended by almost 300 people via zoom. And there were about 25 to 30 people in the room at the DOR though.

Really something that people have been paying attention to had a lot of comment on and just wanted to kind of. Give our thoughts on that. So I guess first Connie, what did you think kind of overall, you know, what was your opinion of the meeting? How you think it went and all that?

Connie Zoerink: Yeah, I think the meeting actually went fairly well.

Um, there were a lot of, a lot of questions. Um, a lot of very frustrated. I don't even say taxpayers, but a lot of frustrated, um, businesses and not understanding how to apply this new fee and how to make it work in their systems and that sort of thing. And I think that. The state did come really well prepared to respond to those questions.

And I do think that there are at the same time, I think there were a lot of questions that went unanswered still. So there's still a lot of work, I think, to be done in figuring out what this, how this fee is going to work.

[00:01:48] Meredith Smith: Yeah. And so kind of what we can applaud the, you know, county to your point, the DOR in saying is, you know, Josh prefaced, the meeting of, Hey, we've read through those comments that we've submitted thus, that were submitted earlier, you know, and there was a lot of questions regarding, can we delay this?

And so, you know, within the first five minutes of when this meeting started and the biggest takeaway, I think for us as practitioners, and this was something that we wanted to know as tax ops, who submitted, you know, comment is this cannot be delayed. So July 1st, it has to go into effect the D so the DOR has no control over that.

What the DOR can do. Is be a little lenient on the enforcement procedures. So something that we learned is that statutorily, this delivery fee has to be separately stated. On customer invoices and paid by the customer. So for the foreseeable future, which I believe was what Josh were, were a recording, was pushed out to the attendees.

So we can put that in the show notes, cuz it's kind of public comment or publicly available. We'll see if we can get that in the show notes is that they are not going to be strict on the requirement of. charging your customers separately stated. So if you, as a business kind of wanna self-assess that fee.

While not part, you know, while not part of the statutory language, the department is not going to pick on pick on that. And also what they say is, you know, they were going to be lenient on kind of late filings and penalty and interest forgiveness, since this is dependent on your sales tax filing. So if you're a monthly filer, you need to, you know, start giving your first share of this fee in theory.

O by August 20th, 2022. So I think that was nice, you know, they kind of doing what they can, right. They're kind of hamstrung based on what went through the legislators and you know, something, Connie, what you picked up on that they really emphasized the taxable goods. Right. So the fee comes into effect when you are selling a taxable good for sales tax purposes, deliver via motor vehicle.

Then that 27 cent fee kicks in. Right. To a location in Colorado to a location in Colorado. Yes. Thank you for that clarifi. Thank you for the

[00:04:32] Connie Zoerink: clarification. yeah. And so that, that alone, that topic raised a ton of questions about what if there's a partial sale? Um, that's partially taxable, not fully taxable, you know, and, and I think they answer questions about.

You know how they'll look at that as well. So again, you know, kind of going back to your point, um, they did, they did say that they would be lenient. Um, and they're also looking for good faith effort and not just blowing off the fee, um, and just waiting for the state to come after you. But if you put forth.

A good faith effort to comply. Even if your system doesn't do it, even if you have to, I believe they mentioned, um, even absorbing the fee for a while. Mm-hmm they are able to kind of, you know, let that go for now until the systems

[00:05:22] Meredith Smith: are more in place. Yeah. So I think, yeah. And there were just a lot of, I think Josh did a good job of just trying to like address as many taxpayer concerns and, and whatnot.

Still a lot of unanswered questions. I think they did keep the work group to two hours. I'm pretty sure they would still be there if, if given the opportunity, but what we could tell kind of in the zoom and who introduced themselves for public comment there. You know, lobbyists, there were tax practitioners like us there, there were business owners, there were software providers in the zoom, you know, that we know there were industry kind of union representatives or trade associations.

Um, again, a lot of practitioners and just businesses. So what kind of. People and people were really upset about it. It's like, why didn't we know about this? We just learned about this. We have to put this in place in July, but this just came out in may or April or later the spring. It's not enough time. So, you know, I appreciate like the department doing what they can in terms of like a leniency thing, but it still, doesn't kind of.

Release the concerns of, of the people who have to impose this thing. And so, you know, I think we will stay on top of it, let you all know what we know. Again, we will try to put a copy of the recording and the show notes and, you know, please. Reach out if you have any questions and thanks for stopping by this Friday afternoon, within 24 hour, you know, shortly 24 hours after the work group concluded. So we will be in touch. Thanks again.

[00:07:01] Closing: This podcast is for educational purposes only and is not intended, nor should it be relied upon as legal tax accounting or investment advice. You should consult with a competent professional to discuss specifics of your situation and the applicability of the information presented.