Industry news: Colorado overhauls and simplifies Retail Delivery Fee law 

Colorado received a hefty amount of pushback last year following the rollout of their new Retail Delivery Fee (RDF) law that impacted wineries and many other types of businesses shipping direct-to-consumers into Colorado. As a result of the feedback from constituents and permit holders, Colorado enacted a bill (SB 23-143) this month that vastly simplifies the RDF requirements. 

What you need to know 

• Wineries that sell less than $500,000 annually from DTC shipments are considered “qualified businesses” and are exempt from paying the RDF 
• The RDF is no longer required to be collected from the end consumer 
• The RDF is no longer required to be listed separately on consumer invoices 
• The RDF will increase from $.27 to $.28 effective July 1, 2023  

Evaluating your current Colorado registrations

Out-of-state wineries selling DTC in Colorado are only required to register for sales tax if they sell over $100,000 in annual DTC sales. Last year, the Colorado Department of Revenue (DOR) automatically registered all businesses with sales tax permits for the new RDF. Following the enactment of the recent RDF changes, any business that falls under the “qualified business” threshold of $500,000 per year will need to close its RDF account if they no longer want to pay the fee.  Check here for information on how to close your RDF account. 

For a deeper dive into the new law and history of the RDF, check out this post from our partners at Avalara.