Colorado Retail Delivery Fee and Sales & Use Tax System (SUTS)

Colorado Retail Delivery Fee ($0.29 per qualifying delivery for FY 2024-25, rising to roughly $0.30 for FY 2025-26 under indexing) applies to motor-vehicle deliveries of at least one item of taxable tangible personal property to a Colorado destination, with a $500,000 prior-year retail-sales de minimis exemption introduced by SB23-143 and the option for retailers to absorb the fee rather than pass it through. The Sales & Use Tax System (SUTS) centralizes filings across 70+ home-rule cities. Colorado state sales tax is 2.9%, the lowest state-level rate in the United States. Marketplace facilitators have collected on behalf of third-party sellers since October 2019. Form DR 1786 reports the Retail Delivery Fee. Tax year 2025.

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1. Scope

This skill covers Colorado state and local indirect-tax obligations affecting retailers and remote sellers shipping into Colorado, with particular emphasis on two features that make Colorado one of the most administratively complex US sales-tax jurisdictions:

1. The Retail Delivery Fee (RDF) under C.R.S. §43-4-218, a per-delivery fee enacted by SB21-260 effective July 1, 2022, materially simplified by SB23-143 effective July 1, 2023, and indexed annually for inflation.
2. The Sales & Use Tax System (SUTS) under H.B. 19-1240 and successor legislation, a centralized filing portal designed to relieve sellers from the historical burden of filing in each of Colorado's 70+ home-rule cities independently.

The skill also addresses adjacent items needed to give a complete answer when a freelancer, e-commerce seller, or small brick-and-mortar retailer asks "how do I deal with Colorado":

• Colorado state sales-tax rate and structure
• State-collected versus home-rule city collection
• Sourcing (origin versus destination)
• Wayfair economic nexus
• Marketplace facilitator rules
• Use tax on out-of-state purchases
• The relationship between RDF and ordinary sales tax
• A brief refer-out to Colorado state income tax (4.4% flat for 2024-25)

Out of scope (refer to specialist skills or the Colorado Department of Revenue):

• Specific home-rule city tax codes and rates beyond illustrating the SUTS workflow
• Cannabis excise and special-district sales tax
• Hotel occupancy, lodging, and short-term rental local taxes
• Motor vehicle sales tax on registration
• The Colorado Retail Marijuana Sales Tax
• Severance tax
• Income tax computation (Tier 1 federal + state-specific add-back skill)
• Construction-use-tax permits for contractors
• Enterprise zone credits and other Colorado credits

Conservative defaults. Where the rule is uncertain or the fact pattern is borderline (especially: whether a particular shipment is a "retail delivery", whether a fee component applies, whether a home-rule city participates in SUTS), assume the fee or filing applies and recommend confirmation with the Colorado DOR or the home-rule city directly.

Reviewer. Every output produced under this skill is assumed to be reviewed by a credentialed practitioner (Colorado-licensed CPA, attorney, or EA with Colorado experience) before any return is filed or any advice reaches the taxpayer.

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2. Colorado Retail Delivery Fee — Overview

2.1 Statutory authority and effective date

The Retail Delivery Fee is imposed by Colorado Revised Statutes §43-4-218 (added by SB21-260, the Sustainability of the Transportation System Act, signed June 17, 2021). The fee took effect on July 1, 2022. It is administered by the Colorado Department of Revenue (DOR), Taxation Division.

The fee was modified by SB23-143 (signed May 4, 2023, effective July 1, 2023) which added a $500,000 prior-year retail sales de minimis exemption and permitted retailers to absorb the fee rather than separately stating it on the invoice. These two simplifications were responses to widespread complaints from small e-commerce sellers and out-of-state retailers about the disproportionate compliance burden of a per-delivery fee that initially had to be itemized on every receipt.

2.2 What triggers the fee

A "retail delivery" subject to the fee occurs when all four of the following are present:

1. A retailer (in-state or remote) makes a sale of tangible personal property;
2. At least one item in the order is subject to state sales or use tax (i.e., not entirely exempt — food for home consumption, prescription drugs, etc., would not by themselves trigger the fee);
3. The property is delivered by motor vehicle (the retailer's vehicle, a contracted carrier, USPS, FedEx, UPS, Amazon delivery, DoorDash, Instacart, or any other motor-vehicle delivery service);
4. The destination is a location in Colorado belonging to the consumer (residential or business address; not the retailer's own location).

The fee is per retail sale, not per item. A single order containing fifteen items shipped in three boxes on three days counts as one retail delivery for fee purposes, provided it is one sale on one invoice. If a customer places two separate orders on the same day, that is two retail deliveries and two fees.

Customer pickup (will-call, curbside, store pickup) is not a retail delivery — no fee.

Wholesale sales (sales for resale, supported by a properly completed Colorado resale certificate) are not retail deliveries — no fee.

Sales entirely of exempt property (e.g., a delivery of only prescription drugs, or only groceries that are exempt food for home consumption with no taxable items in the order) are not retail deliveries — no fee.

Mixed orders containing at least one taxable item trigger the fee on the entire sale, regardless of how small the taxable component is. A grocery delivery that is 95% exempt food and 5% taxable household paper goods still triggers the full $0.29 RDF.

2.3 Rate and indexing

The fee is indexed annually for inflation under §43-4-218(3)(b), with adjustments effective July 1 of each fiscal year.

Fiscal year (July 1 – June 30)	Total RDF
2022-23 (initial)	$0.27
2023-24	$0.28
2024-25	$0.29
2025-26 (DOR notice)	approximately $0.30 — confirm exact rate at filing time

The rate effective during the delivery date controls (not the order date, payment date, or shipping date). For deliveries that straddle a July 1 rate change, use the rate in effect when the delivery occurs.

2.4 The six sub-fees

The single $0.29 amount is actually six separate statutory components, each earmarked for a different transportation or environmental purpose. Retailers report each separately on Form DR 1786 because the Department disburses the revenue to six different cash funds:

Component	FY 2024-25 amount	Purpose
Community Access Retail Delivery Fee	$0.069	Multimodal transportation and mitigation
Clean Fleet Retail Delivery Fee	$0.054	Clean Fleet Enterprise — electric and hybrid commercial vehicles
Clean Transit Retail Delivery Fee	$0.039	Clean Transit Enterprise — electrification of mass transit
General Retail Delivery Fee	$0.092	State highway fund / general transportation
Bridge & Tunnel Retail Delivery Fee	$0.030	Bridge and tunnel maintenance
Air Pollution Mitigation Retail Delivery Fee	$0.006	Front Range air-quality mitigation
Total	$0.29

(Component amounts sum to $0.29 with rounding. The DR 1786 worksheet computes each sub-fee from the same retail-delivery count and the same per-sub-fee rate.)

The breakdown is administratively important because:

• Indexing is applied component-by-component, so the totals do not always round cleanly;
• Some legislative discussions have proposed eliminating or merging individual components;
• An audit defense may require reconciling each sub-fee back to the retailer's order log.

2.5 Who pays the fee — retailer or customer?

Statutory liability for the RDF rests with the retailer, who is the "vendor of motor-vehicle-delivered tangible personal property" under §43-4-218(3)(a). The customer is not directly liable to the State.

Pre-SB23-143 (July 1, 2022 – June 30, 2023): The original statute required the retailer to separately state the RDF on the invoice as "Retail Delivery Fees" and effectively pass it to the customer. This produced widespread complaints — particularly from out-of-state Amazon resellers, Etsy sellers, and similar small-scale remote sellers who suddenly had to add a new line item on every Colorado-bound invoice.

Post-SB23-143 (effective July 1, 2023): Retailers may now absorb the fee. They are still liable to the State, but they may elect not to separately state or pass through the fee. The retailer's accounting choice is purely internal — the State receives $0.29 per delivery either way. Many small remote sellers have chosen to absorb because:

• The fee is small compared to invoice totals;
• A separately stated line item generates customer-service questions;
• Some shopping-cart software does not natively support a per-order flat-fee surcharge;
• Absorbing avoids displaying a "Colorado surcharge" on the customer-facing invoice.

If the retailer does separately state, the fee is shown on the receipt as "Retail Delivery Fees" (the statutory phrase). It is not Colorado sales tax, is not added to the sales-tax base, and does not appear on Form DR 0100 (the sales-tax return).

2.6 The $500,000 de minimis exemption (SB23-143)

The single most important change introduced by SB23-143 was the addition of a prior-year retail-sales threshold: a retailer whose Colorado retail sales in the prior calendar year were $500,000 or less is exempt from the Retail Delivery Fee for the current calendar year (C.R.S. §43-4-218(3)(b)(IV)).

Key features of the exemption:

• The threshold looks at the prior calendar year's Colorado retail sales, not gross sales nationwide.
• A retailer new to Colorado (no prior-year sales) is exempt for that first calendar year.
• Once the retailer crosses $500,000 in a calendar year, RDF liability begins on January 1 of the following year.
• The exemption is automatic — no application is required.
• A retailer that drops back below $500,000 returns to exempt status the following January 1.
• The exemption is independent of the Wayfair economic-nexus threshold for sales tax ($100,000); a remote seller may have a Colorado sales-tax obligation but no RDF obligation if it is below $500,000 in Colorado sales.

Practical effect. The exemption removed many small e-commerce sellers from RDF compliance entirely. The remaining RDF population is dominated by large national e-commerce platforms, Amazon, marketplace facilitators, big-box retailers, and high-volume Colorado in-state retailers.

2.7 Marketplace facilitators and RDF

A marketplace facilitator (Amazon, eBay, Etsy, Walmart Marketplace, etc.) is treated as the retailer for RDF purposes on facilitated third-party sales delivered to Colorado consumers. The marketplace facilitator:

• Collects and remits RDF on the third-party seller's behalf;
• Reports those deliveries on its own DR 1786;
• Is the entity subject to the $500,000 prior-year threshold (measured at the marketplace level, not the individual seller level).

A third-party seller selling exclusively through a marketplace facilitator has no separate RDF registration or filing obligation for those sales, because the facilitator handles the fee. The third-party seller has an RDF obligation only if it makes direct sales (off-marketplace) into Colorado above the $500,000 threshold.

2.8 RDF registration and filing

Registration. A retailer subject to the RDF registers separately for the fee through the Colorado DOR's Revenue Online portal. The RDF account is separate from the sales-tax account, although it is linked by the same Colorado Account Number (CAN). Registration is automatic when the retailer registers for sales tax in Revenue Online and is identified as a retailer making deliveries.

Form. Retailers file Form DR 1786 (Retail Delivery Fee Return). The return reports the number of retail deliveries during the period multiplied by each of the six sub-fee rates, and the resulting amounts owed.

Filing frequency. Frequency is determined by the same rules as the sales-tax return:

• Monthly if expected RDF liability exceeds approximately $300/month (over roughly 1,000 deliveries/month);
• Quarterly if liability is between roughly $15/month and $300/month;
• Annually for very small filers below quarterly thresholds.

(The dollar thresholds are administered by the DOR and may be adjusted; verify on Revenue Online when registering.)

Due dates. RDF returns are due on the 20th of the month following the close of the reporting period — the same due date as the sales-tax return. A monthly retailer's January RDF return is due February 20.

Payment. Electronic filing and payment via Revenue Online are required. Paper Form DR 1786 is available for limited cases but the Department encourages electronic filing.

Combined filing. RDF cannot be combined with sales-tax remittance on Form DR 0100; the two returns and payments are separate, even though the underlying transactions overlap.

2.9 Refunds and corrections for returned merchandise

When a customer returns a Colorado-delivered item and the retailer issues a refund, the original retail delivery is treated as having occurred for RDF purposes (the delivery happened; the fee was earned). However, the retailer may claim a credit on the next DR 1786 for the RDF associated with the returned delivery if the entire order is returned. Partial returns do not give rise to an RDF credit because the delivery still occurred and the fee is per delivery, not per item.

The mechanics:

• The retailer's order log identifies the original delivery date and DR 1786 period;
• The current-period DR 1786 reduces the retail-delivery count by the number of full-order returns;
• The reduction cannot drive the period count below zero; excess credits carry forward.

2.10 Recordkeeping

The retailer must maintain, for at least three years (the standard Colorado sales-tax look-back), records sufficient to substantiate:

• The number of retail deliveries to Colorado destinations;
• The taxable status of items in each order;
• The delivery date (to determine which fiscal-year rate applies);
• Whether the retailer absorbed or separately stated the fee;
• For marketplace facilitator sales, the facilitator's RDF reporting on the seller's behalf.

For an e-commerce seller with multi-channel sales, the record set typically combines:

• The shopping-cart export (date, customer ZIP, order total, items);
• The shipping carrier export (delivery confirmation date);
• The tax-engine export (taxability decisions per item);
• The marketplace 1099-K or facilitator settlement report (for marketplace channels);
• A reconciliation worksheet to ensure no delivery is double-counted across channels.

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3. Colorado Sales Tax — State Structure

3.1 State rate

The Colorado state sales-tax rate is 2.9%, the lowest state-level sales-tax rate in the United States among states that impose sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon impose none). The 2.9% rate has not changed since the 2.9% increase from 2% adopted in the early 1980s.

3.2 Local additions

On top of the 2.9% state rate, a Colorado retail sale typically incurs:

• A county sales tax (varies; usually 0.5%–2%);
• A statutory city sales tax administered by the state, OR a home-rule city sales tax administered by the city itself;
• One or more special-district taxes (Regional Transportation District (RTD), Scientific & Cultural Facilities District (SCFD), Football Stadium District (where applicable), local-improvement districts, public-improvement fees);
• Occasionally, county lodging or short-term-rental add-ons (not in scope here).

The combined rate in a typical Colorado metro destination is in the 7%–9% range. Denver, Boulder, Colorado Springs, and Aurora are all in that band. The highest combined rates in the state cluster around 10% in certain mountain resort towns.

The retailer is responsible for collecting and remitting the combined rate at the customer's destination address, which can vary block-by-block depending on overlapping district boundaries. Modern tax engines (Avalara, TaxJar, Vertex, Sovos) maintain the boundary databases.

3.3 State-collected versus home-rule

Colorado is unusual nationally in that approximately 70+ cities are home-rule cities that have independently administered their own sales taxes historically. Pre-SUTS, a retailer making sales into Denver, Boulder, Aurora, Colorado Springs, Fort Collins, Greeley, Lakewood, Westminster, Centennial, and dozens of others had to file a separate return with each city, in addition to filing the state DR 0100 for state-collected jurisdictions.

This produced a notorious compliance burden:

• 70+ separate accounts and returns;
• 70+ separate due dates (most aligned to the 20th, but not all);
• 70+ separate definitions of taxable property (some cities tax services that the State does not, or vice versa);
• 70+ separate audit programs.

State-collected jurisdictions. All counties, statutory cities, and all special districts are state-collected — the retailer files the DR 0100 with the State, and the State remits the local portions to the local jurisdictions.

Self-collected (home-rule) cities. Each home-rule city has historically operated its own tax department. The SUTS portal (Section 5) is the current consolidation mechanism.

3.4 What is taxable

Colorado state sales tax under C.R.S. §39-26-101 et seq. applies to:

• Tangible personal property sold at retail;
• A limited list of enumerated services (telephone, gas/electric utility, prepared food, lodging under 30 days, certain admissions);
• Software delivered on tangible media (older rule; mostly historical);
• Specific digital goods only as the General Assembly has expressly enumerated.

Most services are not taxable at the state level. This is a Colorado norm, but home-rule cities may tax services that the State does not — for example, certain home-rule cities tax software-as-a-service, advertising, or other professional services. A freelance software developer billing a Colorado client for services should treat the work as state-exempt but should confirm city-by-city for any home-rule destination that may impose city sales tax on SaaS or digital products.

Common exemptions:

• Food for home consumption (state exempt; local treatment varies);
• Prescription drugs and medical devices;
• Agricultural inputs (seed, livestock, feed);
• Manufacturing machinery (with exemption certificate);
• Sales for resale (with completed resale certificate);
• Sales to the federal government and to Colorado state government;
• Sales to qualifying §501(c)(3) charities with a Colorado exemption certificate.

3.5 Use tax

Colorado imposes a 2.9% state use tax plus applicable local use taxes on tangible personal property purchased outside Colorado for use, storage, or consumption in Colorado when sales tax was not collected at the point of sale. The use tax is the consumer's responsibility and is reported on:

• Form DR 0252 (Consumer Use Tax Return) for individuals and businesses;
• The individual income-tax return (Form DR 0104) has a use-tax line for occasional purchases;
• Many home-rule cities have their own use-tax return.

Use tax is most commonly encountered for:

• Out-of-state purchases of office equipment, computers, furniture by businesses;
• Direct-mail or out-of-state online purchases by consumers where the seller did not charge Colorado sales tax (now rare post-Wayfair);
• Inventory withdrawals for personal use;
• Property brought into Colorado from another state by a new resident.

A business may register for a use-tax-only account if it makes frequent out-of-state purchases that incur use tax.

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4. Wayfair Economic Nexus and Marketplace Facilitators

4.1 Economic nexus threshold

Following South Dakota v. Wayfair (2018), Colorado adopted economic-nexus rules in 2018-2019:

• $100,000 in Colorado retail sales in the current or preceding calendar year;
• No transaction-count threshold (Colorado dropped the original 200-transaction prong in 2019).

A remote seller exceeding $100,000 in Colorado retail sales must:

1. Register for Colorado sales tax with the DOR;
2. Collect and remit state-collected sales tax (state + state-collected county/city/district);
3. Register separately with each home-rule city into which it ships and where the city's economic-nexus threshold is met (most home-rule cities adopted $100,000 thresholds matching the State by 2021-2022);
4. Register for the RDF if the $500,000 prior-year threshold is also met;
5. File the appropriate periodic returns.

4.2 Marketplace facilitator collection

Effective October 1, 2019, marketplace facilitators (defined to include Amazon, eBay, Etsy, Walmart Marketplace, etc.) are required to collect and remit Colorado sales tax on all sales they facilitate to Colorado destinations, regardless of whether the underlying third-party seller would have nexus. This means:

• A marketplace seller's marketplace sales are collected by the marketplace;
• The third-party seller does not include marketplace sales in its own Colorado nexus computation;
• The third-party seller still has an obligation for any off-marketplace (direct, own-website) sales into Colorado;
• The marketplace handles RDF for the marketplace sales as discussed in §2.7.

For a freelancer or small business selling exclusively through Etsy or Amazon, this means no separate Colorado registration is needed for those marketplace sales. Registration is required only if the seller also runs its own e-commerce site that ships into Colorado above the $100,000 / $500,000 thresholds.

4.3 Home-rule city economic nexus

Each home-rule city sets its own economic-nexus threshold. By late 2024, the substantial majority of home-rule cities had adopted thresholds matching the State's $100,000 (no transaction count), often via the Colorado Municipal League model ordinance. A handful of cities maintain different thresholds — verify city-by-city at filing time, especially for newer SUTS participants.

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5. The Sales & Use Tax System (SUTS)

5.1 Background and authority

SUTS was authorized by H.B. 19-1240 (the source-of-sourcing reform legislation) and developed jointly by the Colorado DOR and the Colorado Municipal League. The SUTS portal went live in 2020 as a centralized filing platform that allows a seller to:

1. Determine the correct combined tax rate at any Colorado destination address using the Geographic Information System (GIS) lookup;
2. File a single return through the portal that includes the State, all state-collected jurisdictions, and all participating home-rule cities;
3. Make a single payment that the portal disburses to the State and to each participating home-rule city.

The portal is free to use. Sellers may also choose to file directly through commercial tax-engine integrations (Avalara, TaxJar, Vertex) that connect to SUTS via API.

5.2 Participation status

SUTS is voluntary for home-rule cities. The State strongly encouraged participation, and adoption has been progressive:

• 2020-2021: Initial home-rule cities joined; Aurora, Centennial, several Front Range suburbs joined early.
• Late 2022: Denver joined SUTS, a major milestone given Denver's economic weight.
• 2023-2024: Boulder, Colorado Springs, Fort Collins, Lakewood, Westminster, Greeley, Longmont, Loveland, and most major home-rule cities had joined.
• 2025: The vast majority of the 70+ home-rule cities participate. A handful of small home-rule cities still require independent direct filing.

Practical check before filing. Always verify on the SUTS portal which cities in the shipping footprint are participating. For any non-participating home-rule destination, the retailer must file directly with that city.

5.3 What SUTS does and does not do

SUTS does:

• Consolidate filing across the State and participating home-rule cities;
• Provide the GIS rate-lookup tool that returns the combined rate at any Colorado address;
• Allow a single ACH-debit payment that the portal disburses;
• Provide a confirmation receipt that satisfies the filing obligation in each participating jurisdiction.

SUTS does not:

• Change the underlying tax rates — each city's rate remains city-specific;
• Change taxability rules — a city that taxes SaaS will still tax SaaS, and the seller must report under that city's rules;
• Replace the home-rule city's audit authority — each home-rule city retains the right to audit the seller for its own portion of the return;
• Cover RDF — Form DR 1786 is a separate filing not in SUTS;
• Cover specialty filings (lodging, cannabis, etc.).

5.4 Workflow for a SUTS-filing retailer

1. At order acceptance: the retailer's shopping cart calls the SUTS GIS API (or a commercial tax engine) with the customer's delivery address to obtain the combined sales-tax rate and the jurisdiction breakdown.
2. Throughout the period: the retailer accumulates per-jurisdiction sales-tax collected.
3. At period close: the retailer logs into the SUTS portal (or pushes the filing via API).
4. The portal displays a single return form with the State (DR 0100) data and each participating home-rule city's required data on the same screen.
5. The seller reviews and submits.
6. A single ACH-debit payment is initiated; the portal handles disbursement.
7. Confirmation receipts are issued for each jurisdiction.

For non-participating home-rule cities, the retailer files separately on that city's own portal as before SUTS.

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6. Sourcing — Origin vs Destination

6.1 State-collected sourcing

Following the SUTS implementation and H.B. 19-1240, Colorado state-collected sales tax is destination-sourced: the seller charges the rate in effect at the customer's delivery address (for shipped sales) or the seller's place of business (for in-person sales).

For shipped sales:

• In-state seller, in-state customer: destination rate.
• In-state seller, out-of-state customer: Colorado does not apply (other state's rules apply).
• Out-of-state seller, in-state customer: destination rate (after Wayfair nexus is met).

6.2 Home-rule city sourcing

Historically, many home-rule cities used origin sourcing — the seller charged the city rate where the seller's place of business was located, regardless of where the customer was. Following SUTS adoption and the parallel litigation under Quill / Wayfair, home-rule cities have largely converged on destination sourcing, particularly for remote (online) sales.

A small number of home-rule cities still use origin sourcing for in-person retail sales (the customer walks into the store, the city of the store applies). This is a narrow remaining exception and does not affect e-commerce sellers.

6.3 Practical implication

The destination ZIP code alone is not sufficient to determine the correct combined rate — ZIP-code boundaries do not align with city or district boundaries. The seller must use the SUTS GIS lookup or an equivalent address-validating tax engine that returns the precise jurisdiction stack at the delivery address.

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7. Interaction with Other Tax Systems

7.1 RDF is not sales tax

The Retail Delivery Fee is not Colorado sales tax. It is a separate excise. Consequences:

• The RDF is not included in the sales-tax base (i.e., a separately stated RDF on the customer invoice does not increase the sales-tax subject to collection);
• The RDF is not reported on Form DR 0100;
• The RDF is not included in the SUTS filing;
• The RDF cannot be offset by a sales-tax credit and vice versa;
• The RDF is collected and remitted only at the state level — home-rule cities do not impose a parallel local delivery fee.

7.2 RDF and shipping charges

Shipping charges separately stated on the invoice are generally not subject to Colorado sales tax (Colorado has historically been a "separately stated shipping is exempt" state, subject to the rule that the delivery occurs after the sale and is at the customer's option). The RDF is independent of shipping treatment — the RDF applies whether shipping is taxed, exempt, or absorbed.

7.3 No general VAT or reverse-charge mechanism

Colorado, like all US states, has a sales tax rather than a value-added tax. There is no reverse-charge mechanism for B2B services in Colorado sales tax. A Colorado business purchasing a taxable service from an out-of-state vendor that does not charge sales tax owes use tax on the purchase but does not "self-account" through a VAT-style reverse-charge return.

Practitioners coming from EU VAT systems should be careful with terminology — a Colorado B2B services purchase from out-of-state typically generates no Colorado tax (services are usually exempt at the state level) but may generate a home-rule city use-tax obligation if the city taxes the service.

7.4 Brief refer-out to Colorado income tax

Colorado individual income tax is a flat 4.4% for tax year 2024 (declining from 4.55% in 2022 and 4.40% in 2024-2025 under Proposition 121 and subsequent TABOR refunds). 2025 is also expected to be at or near 4.4% pending TABOR-driven temporary reductions. This skill does not cover income tax computation. Refer to a Colorado individual income-tax skill for Form 104 preparation, addbacks for federal QBI, the SALT cap, retirement subtractions, and the Colorado-specific credits.

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8. Worked Examples

The three examples below illustrate the most common Colorado fact patterns. Each example walks through nexus, sales tax, RDF, and SUTS for the year.

8.1 Example 1 — Large national Amazon seller making 1,000 Colorado deliveries per month

Facts. "AcmeGoods" is an Indianapolis-based seller of taxable household goods. AcmeGoods sells through:

• Its own website (acmegoods.com): $4 million/year nationally; $400,000 to Colorado;
• Amazon Marketplace: $6 million/year nationally; $700,000 to Colorado;
• Total Colorado retail sales: $1.1 million.

Average Colorado order: ~$92. Volume: ~12,000 Colorado orders/year direct, plus ~7,500/year via Amazon. About 1,000 Colorado deliveries/month total.

Nexus.

• Direct sales of $400,000 exceed the $100,000 Wayfair threshold → AcmeGoods registers for Colorado sales tax (DR 0100), enrolls in SUTS, and collects/remits state-collected and participating home-rule city tax on the direct-channel sales.
• Marketplace sales of $700,000 are collected by Amazon → AcmeGoods does not include them in its own DR 0100. Amazon collects and remits sales tax on those.

RDF.

• The $500,000 de minimis exemption is measured at the retailer level for direct sales, and at the marketplace level for marketplace sales.
• AcmeGoods' direct Colorado retail sales of $400,000 are below $500,000 → AcmeGoods' direct channel is exempt from RDF.
• Amazon's Colorado retail-sales footprint vastly exceeds $500,000 → Amazon collects and remits RDF on the marketplace sales as facilitator.
• AcmeGoods owes no RDF for 2025 because its direct channel is below $500,000 and the marketplace handles its marketplace deliveries.

Sales tax filings.

• Monthly DR 0100 filed through SUTS, covering the direct channel only.
• Single ACH payment per month consolidating State, county, special-district, and participating home-rule city tax.
• For each city not yet on SUTS, a separate direct filing.

Watch-list item. If AcmeGoods grows its direct channel above $500,000 in any calendar year, RDF begins on January 1 of the following calendar year for the direct channel. The seller should monitor monthly and configure its shopping cart to accumulate Colorado direct sales for the threshold trigger.

Compliance cost. With SUTS, AcmeGoods files essentially one sales-tax return per month for Colorado plus a handful of holdout cities. Pre-SUTS, the same retailer would have filed the State plus 20+ separate home-rule city returns.

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8.2 Example 2 — Small e-commerce seller below $500,000

Facts. "Mountain Mug Co." is a Bozeman, Montana, Etsy seller of handmade ceramic mugs. 2024 sales:

• Etsy marketplace: $180,000 (90 mugs/month average; $50 average price), of which about $9,000 was delivered to Colorado.
• Own website (mountainmug.com): $45,000 nationally, $3,000 to Colorado.
• Total Colorado retail sales: ~$12,000.

Nexus.

• Total Colorado direct (non-marketplace) sales of $3,000 → well below the $100,000 Wayfair threshold → no Colorado sales-tax registration required for the direct channel.
• Etsy collects and remits Colorado sales tax on Etsy sales as the marketplace facilitator.

RDF.

• Direct channel sales below $500,000 (in fact below $100,000) → exempt.
• Etsy handles RDF on Etsy sales.
• Mountain Mug Co. has no Colorado RDF obligation.

Sales tax filings. None — the marketplace handles the only Colorado channel of any volume, and the direct channel is below threshold.

What changes if direct sales grow.

• If direct Colorado sales reach $100,000 in any year → register for sales tax, file DR 0100 through SUTS.
• If direct Colorado sales reach $500,000 in any year → register for RDF beginning January 1 of the following year.
• Etsy continues to handle the Etsy portion regardless.

Conservative-default note. Even at $12,000 in Colorado sales, the practitioner should verify there is no physical-presence nexus (a Colorado employee, a Colorado warehouse, inventory stored at an Amazon Colorado fulfillment center for Mountain Mug Co.'s own non-Etsy goods, attending a Colorado craft fair). Physical nexus has no minimum threshold and overrides the economic-nexus number.

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8.3 Example 3 — Brick-and-mortar Denver retailer using SUTS for occasional delivery

Facts. "Larimer Outfitters" is a Denver brick-and-mortar outdoor-gear retailer.

• In-store retail sales: $1.4 million/year, all in Denver (8.81% combined rate as of 2025: 2.9% State + 0.10% RTD/SCFD + 4.81% Denver).
• E-commerce sales (in-house website with shipping nationally): $600,000/year, of which $200,000 to Colorado destinations outside Denver.
• About 4,000 Colorado deliveries/year.

Nexus.

• In-store sales: Denver origin, Denver destination → Denver tax + State + special districts.
• E-commerce direct to Colorado destinations: destination-sourced; rate determined per delivery address via SUTS GIS.
• E-commerce direct to other states: Colorado does not apply; other states' Wayfair rules may.

RDF.

• Larimer's total Colorado retail sales (in-store + Colorado e-commerce) = $1.4M + $200K = $1.6 million, above the $500,000 threshold → Larimer is subject to RDF for 2025.
• In-store sales are not retail deliveries (customer pickup at the store) → no RDF on those.
• E-commerce Colorado deliveries: 4,000/year × $0.29 = $1,160/year in RDF.
• Larimer files monthly DR 1786 (4,000/12 ≈ 333 deliveries/month, well above the monthly threshold for monthly filing).
• Larimer elects under SB23-143 to absorb the fee rather than show it on the customer invoice — a conservative choice for a small retailer wanting to avoid customer-service questions.

Sales tax filings via SUTS.

• Larimer enrolls in SUTS. Single monthly filing covers:
  • State (DR 0100 equivalent) at 2.9%;
  • State-collected counties and special districts at the appropriate rates;
  • Denver (a SUTS-participating home-rule city) for the in-store and Denver-delivery sales;
  • Other participating home-rule cities (Boulder, Colorado Springs, Aurora, etc.) for those deliveries.
• One ACH debit per month covers all of it.
• Form DR 1786 is filed separately on the same 20th-of-the-month schedule.

Compliance burden comparison.

• Pre-SUTS (hypothetical 2019): Larimer would have filed the State return plus ~20 separate home-rule city returns each month — call it 25 separate filings monthly, plus tracking 25 separate due dates and payment portals.
• With SUTS (2025): Larimer files one SUTS return covering State and home-rule cities, plus one DR 1786 — 2 filings monthly.

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9. Compliance Calendar — Combined Sales Tax + RDF for a 2025 Monthly Filer

Period closed	DR 0100 (via SUTS) due	DR 1786 (RDF) due
January 2025	February 20, 2025	February 20, 2025
February 2025	March 20, 2025	March 20, 2025
March 2025	April 21, 2025 (20th is Sunday)	April 21, 2025
April 2025	May 20, 2025	May 20, 2025
May 2025	June 20, 2025	June 20, 2025
June 2025	July 21, 2025 (20th is Sunday)	July 21, 2025
July 2025	August 20, 2025	August 20, 2025
August 2025	September 22, 2025 (20th is Saturday)	September 22, 2025
September 2025	October 20, 2025	October 20, 2025
October 2025	November 20, 2025	November 20, 2025
November 2025	December 22, 2025 (20th is Saturday)	December 22, 2025
December 2025	January 20, 2026	January 20, 2026

(Verify each weekend/holiday roll on the DOR's posted due-date calendar; the 20th rolls forward to the next business day when it falls on a Saturday, Sunday, or state holiday.)

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10. Penalties

Late filing or late payment of either DR 0100 or DR 1786 incurs:

• A 10% penalty on the tax/fee due, or $15 minimum, whichever is greater;
• Interest at the statutory rate (set by the DOR, currently around 7-9% annual);
• For RDF specifically, the penalty applies per return, not per delivery — i.e., a missed monthly return creates a single penalty event rather than 1,000 separate violations.

Negligence or fraud can raise the penalty substantially under §39-21-119.

Failure to register when required can lead to a back-look exposure for the entire period of unfiled nexus — up to seven years for a non-filer who never registered, under the standard Colorado statute-of-limitations rules. A voluntary disclosure agreement (VDA) with the DOR can typically limit the look-back to three or four years and waive the penalty in exchange for full disclosure and prospective compliance.

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11. Conservative Defaults and Refusals

Conservative defaults applied throughout this skill:

• If the question is whether a particular delivery is a "retail delivery" subject to RDF, assume yes unless clearly outside the four-element test in §2.2.
• If the question is whether the seller has crossed the $100,000 sales-tax threshold or the $500,000 RDF threshold, treat ambiguous figures conservatively (closer to threshold means register).
• If the question is whether a home-rule city participates in SUTS, verify on the portal at filing time and treat the city as non-participating (separate filing) if unverified.
• If the question is whether a particular item is taxable, assume taxable unless an enumerated exemption clearly applies.

Refusals. This skill refuses to produce:

• Specific advice on whether a particular home-rule city taxes a specific service (refer to that city's tax code or a Colorado state-local specialist);
• Cannabis sales tax computations (separate excise regime);
• Construction-use-tax permit advice;
• Multistate apportionment for income tax (out of scope);
• Any advice that would help a taxpayer evade rather than mitigate tax (e.g., structuring deliveries to avoid the per-delivery fee in a way that misrepresents the underlying sale).

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12. Reviewer Checklist

Before signing off on a Colorado RDF/SUTS engagement, the reviewer should confirm:

• The taxpayer's prior-year Colorado retail sales have been measured against both the $100,000 sales-tax threshold and the $500,000 RDF threshold.
• Marketplace sales have been separated from direct sales for nexus measurement.
• The taxpayer's shopping cart or tax engine is calling the correct rate-lookup source (SUTS GIS or a maintained commercial database).
• All home-rule cities into which the taxpayer ships have been identified, and SUTS participation has been verified for each.
• For non-SUTS home-rule destinations, direct registration and filing are in place.
• Form DR 1786 has been filed for each period in which the RDF applies, with the correct sub-fee breakdown.
• The retailer's absorb-vs-pass-through election under SB23-143 is consistently applied across invoices and reflected in accounting.
• Refunds and full-order returns have been credited correctly against the DR 1786 delivery count.
• Records (order log, carrier confirmation, taxability decisions, marketplace settlement reports) are retained for at least three years.
• Use-tax exposure has been considered for the taxpayer's own out-of-state purchases of office equipment, software, and inventory withdrawals.

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13. Provenance

Primary statutory and regulatory sources (current as of November 15, 2025):

• C.R.S. §43-4-218 — Retail Delivery Fee (SB21-260 as amended by SB23-143).
• C.R.S. §39-26-101 et seq. — Colorado Sales and Use Tax.
• 1 C.C.R. 201-4 — Sales and Use Tax Regulations.
• H.B. 19-1240 — sourcing reform and SUTS enabling legislation.
• SB21-260 (2021) — original RDF enactment, effective July 1, 2022.
• SB23-143 (2023) — RDF simplification, $500,000 de minimis, absorb-or-pass-through option, effective July 1, 2023.

Colorado Department of Revenue guidance:

• DOR Retail Delivery Fee landing page (tax.colorado.gov/retail-delivery-fee) — current rate, sub-fee components, registration and filing guidance.
• DOR SUTS landing page (tax.colorado.gov/SUTS) — participating jurisdictions list, GIS lookup, filing portal.
• Form DR 1786 — Retail Delivery Fee Return and instructions.
• Form DR 0100 — Colorado Retail Sales Tax Return.
• Form DR 0252 — Consumer Use Tax Return.
• Colorado Sales/Use Tax Rates publication DR 1002 (revised periodically; check current version at filing time).

Case law:

• South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018) — economic-nexus foundation.

Secondary references:

• Colorado Municipal League model home-rule sales-tax ordinance and SUTS guidance.
• Tax Foundation, "Facts & Figures 2025: How Does Your State Compare?" — state sales-tax rate ranking (Colorado at 2.9% confirmed lowest non-zero state rate).

Verification status. This skill is verified_by: pending. Before reliance, the reviewer should re-verify:

1. The current FY 2025-26 RDF total and sub-fee breakdown on the DOR RDF page;
2. The current SUTS participant list (changes quarterly);
3. The current Colorado state and combined rates for any specific delivery destination via SUTS GIS;
4. Any legislative changes from the 2025 and 2026 Colorado General Assembly sessions that may affect §43-4-218 or the SUTS framework.

Last updated: 2025-11-15. Tax year: 2025.

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