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SECOND AND FINAL READING OF AN ORDINANCE AMENDING THE SALES AND USE TAX CODE OF THE CITY OF COMMERCE CITY TO ESTABLISH AN EXEMPTION FROM THE CITY’S SALES AND USE TAX FOR CERTAIN RETAIL DELIVERY FEES AND CARRYOUT BAG FEES ENACTED BY THE STATE OF COLORADO
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Summary & Background
Delivery Fee
On July 1, 2022, Colorado imposed a retail delivery fee on all deliveries by motor vehicle to a location in Colorado with at least one item of tangible personal property subject to state sales or use tax.
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.
Based on the current wording in our Code, this fee is subject to the City’s Sales and Use Tax unless an exemption is created.
For every 1,000 deliveries made within the City, $ 270 in state mandated delivery fees are charged and collected from the buyer. $ 0 of these fees are remitted directly to the City. All $ 270 is remitted directly to the State. Commerce City sales or use tax is also due on these fees. The amount due on 1,000 deliveries would be $ 12.15. The cost to the taxpayer to properly track, report and remit this tax far exceeds the tax collected and remitted. For this reason, exempting the state mandated delivery fee from Commerce City’s Sales and Use Tax is recommended. Other home rule municipalities have indicated they will be exempting these fees from their local tax in the future.
Bag Fees
Beginning January 1, 2024, the State of Colorado prohibits Colorado based stores and retail food establishments from providing single-use plastic carryout bags to customers.
Between January 1, 2023, and January 1, 2024, a store may furnish a recycled paper carryout bag or a single-use plastic carryout bag t...
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