Colorado Retail Delivery Fee Sales Tax starting 7/1/22

Hi there, @tgregson.

I'm here to help set up sales tax in Colorado. To keep an accurate record of taxes and easily monitor and remit them to the appropriate tax collecting agency.

In order to record sales tax, you need to turn on the sales tax feature and set up sales tax items or groups.

Here's how:

1. Go to the edit menu, then select Preferences.
2. In the Preferences window, select Sales Tax then go to the Company Preferences tab.
3. Select Yes to turn on sales tax.
4. Set up the sales tax items or sales tax groups for each county, district, city, etc. where you collect sales tax. Click Add sales tax item to do this.
5. Assign sales tax codes. Sales tax codes help you track taxable and non-taxable sales and/or customers.
6. Set the Sales tax basis (Accrual or Cash). Take into account your company’s accounting an preference.
7. Set up your preference for paying the sales tax (Monthly, Quarterly, Annually).
8. Tap ok.

To learn more about the process, check out this article: Set up sales tax.

I'm also adding this article on how to troubleshoot issues or unexpected results you may encounter while managing your sales tax in QBDT: How to resolve common sales tax issues. It includes topics about sales tax payables and items affecting a group, to name a few.

Let me know if you have other concerns about setting up sales taxes in QBDT. I'm just around to help. Take care always.

This did not help.

This is not helpful.

I was asking about the Colorado Department of Revenue Retail Delivery Fee.

It is a fee per delivery via motor vehicle.

I don't think adding another sates tax item will work because it is a flat fee and there will already be a sales tax rate for the location in Colorado.

I have made an item for CODR RDF and an Other Current Liability for Colorado DOR RDF.

I was hoping to hear from someone in Colorado on how they plan on handling this.

Please note Intuit, your current software is not going to be compliant with the new sales tax requirements starting July 1 2022.  The new fee required is a flat $.27 per invoice and your system only allows for a percentage for sales tax.  If we setup an item to charge this it will not show on our sales tax report.  Please address. 

Hello, @KeyQuill. 

I understand how much you want to see this per invoice tax in Colorado update added in QuickBooks Desktop starting July 1, 2022. Our product developers know this and already doing our best to comply with the Colorado Retail Delivery fee Sales Tax this coming July.

On the other hand, I know how much you want to enter a fixed amount ($0.27) of sales tax per invoice. However, this feature is unavailable right now in QuickBooks Desktop.

You might want to consider looking for a third-party app that has the feature you need. You can check the QuickBooks Desktop App Center to look for an app from there. Once you've found one, select the app and click Take the Tour or Learn More.

Furthermore, if you want help with complex taxes, you can work with a tax expert or your accountant for more advice. They can give you their expert guidance on how to track it efficiently. If you’re not affiliated with one, visit our ProAdvisor page to help you find one.

You may also consider checking these sites to see our products and feature updates and setting up sales tax on how to collect them:

• Product Updates
• Collect Sales Tax

Feel free to post anytime if you have other concerns with sales tax regulations. I'll do my very best to help you more. Stay safe and well!

I am a pro advisor for Quickbooks and have been for 15 years.  Your answer is indicating this is creating a complex tax issue but it isn't, this is going to be a standard issue for 99% of Colorado businesses that have to charge sales tax. 

The only work around solution, and not a great one, is to create an item for the RDF that is added to every invoice it applies too.  Make sure you select it not to be taxable so you don't charge sales tax on the RDF.  Then each time you need to report your sales tax you will need to run a report on the item to know how much you will be paying in.  The issue, where it gets complicated, is you won't know for which non physical location to attach the amount to unless you setup an RDF for every location of sales tax. 

Thank you, only helpful info on this thread! What account would you suggest for this?

Thanks again!

When you are making the new item, what type of income account should you direct to in your Chart of Accounts? Should it be "income" or "other liability"?

according to the website, it has to be it's own item and it does not have to separated out into jurisdiction codes.https://tax.colorado.gov/retail-delivery-fee

But it would be nice to know how to best set it up in QB desktop.

Thank you for joining the thread, @dustyb7.

As my colleague Jovychris_A mentioned above, the option to enter a fixed amount of sales tax per invoice is currently unavailable in QuickBooks Desktop (QBDT). 

You can also consider utilizing a third-party application that contains the feature you need. Kindly check out our QuickBooks Desktop App Center to look for supported applications to integrate with QuickBooks. 

Additionally, check out the following article for your reference when setting up sales taxes and getting products and features updates:

• Product Updates
• Collect Sales Tax

Let me know if you have further questions about taxes. I’ll be around the corner to assist you. Have a good one!

Regarding the Retail Delivery Fee - it is a FEE, not a tax.  So all of the responses regarding sales tax, you are not helping with a solution.

(Let me vent a minute, Colorado loves their fees so that taxpayers are not allowed to go to the ballot box to vote on them.  Have you registered a vehicle recently?  It's ridiculous!  And the administrative nightmare they have created shows they don't care about businesses, large or small).

Back to the issue at hand.  It has to be paid to our Colorado Department of Revenue, but is NOT included on the Sales Tax Return for CoDOR.  It is filed and paid separately.

I too am trying to figure out how to include on the invoices that it needs to be added to and then to run a report monthly on the amount collected.  

I think what I am going to do is set it up under Lists - Other Charge as RDF, Non-taxable, Other Current Liability.  And until I can figure out how to add that line on my Estimate/Invoice Templates to be included in the sub-total, I am going to have to go in physically and include that line at the top of every Estimate and/or invoice.  I will then train my staff to add that line to their Estimates/Invoices prior to sending to the customer when delivery is being made in Colorado.  

If anyone has a better solution, please email me directly at [email address removed].

Thank you.

Sheila Lake
[email address removed]

You pretty much nailed it.  Setup as an other charge directing to a liability and then add the item to every invoice.  Not pretty but it is a work around as my faith in QBs addressing the issue is fairly low since I have home ruled jurisdictions they have setup incorrectly years after they now get filed with the CODOR. 

Yes, I also believe this was a little under handed by Colorado to add a fee to circumvent the tax payers being able to vote on the increase. 

Also, make sure you are putting a quantity of 1 for each charge as you have to report the total amount of deliveries made on the report. 

I have my RDF setup the same way as you. Maybe the good folks at Intuit will get off their duffs and make the appropriate changes to QBDT, so that this process is a little more automated. 

Thank you for your input.  I guess as we move forward being forced to charge, collect, report and pay this Retail Delivery Fee, if anyone has ideas that will make this process easier it would be great. 

I am not optimistic either with QBDT making any changes.  The sales tax section of QB is so antiquated it is ridiculous.  The jurisdictions (all 800+) in Colorado are constantly changing what sales tax is to be charged, the amount and who it needs to be collected from, filed and paid to. 

Good luck!

KeyQuill,

I am thinking through this Retail Delivery Fee which I need some clarification.  First of all isn't interesting they have an open meeting to answer questions and listen to concerns.  Great, but it is 7 days before it goes into effect, even though they say they passed this Fee back in 2021.  And they say they can't postpone the start date? Really, why?   Why didn't we hear about it in 2021 so we could voice concerns about the impact to businesses and postpone it or better yet stop it from going forward or require it to go to vote.

Anyway, what I need clarified is the following:

1 customer invoice

3 line items, each containing a different piece of equipment, all taxable.

Is that 1 charge of $.27 or is that 3 charges of $.27? 

Help!

Thanks.

Thanks for getting back, @slake01.

As of the moment, the option to automatically add the Retail Delivery Fee Sales Tax per invoice is unavailable in QuickBooks Desktop (QBDT). Also, there’s no specific time provided on when this feature is available in QuickBooks. 

In the meantime, you can create an item of the type "Other Charge." Use a liability account that you've created specifically for this surcharge as its account. Then, use the same account on the check when paying it off from your bank account.

If you have further questions regarding this concern, you can always press the reply button to post them here. Have a good one!

@slake01 To answer your question, it's one $0.27 fee per each order, not each line item.  Hope that helps :) 

I was interested to hear what everyone is doing if they are selling from within Colorado to a Colorado end-user/customer and shipping via Fedex, UPS etc..  that still counts as "via a motor vehicle" and so I'm thinking it still applies...  in fact, the fee applies to each order unless a) the customer comes to the location to pick up or b) the sale is a digital download (like images, SVGs etc..). 

As for how QBO is going to deal with it, I'm thinking to do what you are all doing with an expense account, liability account and an item (non-taxable) to be manually added (or deleted if not applicable) for each order.

Plum

Here is the official link to the State's website:  https://tax.colorado.gov/retail-delivery-fee

The fact that Quickbooks, the largest accounting software for small business cannot figure out how to do this is appalling.  Further, quickbooks inability to allow me to pay my sales taxes using credit card as a payment option is baffling.  Quickbooks is quickly booking itself into uselessness.

This falls in line with discontinuing QBDT in the not too distant future, forcing all their clients on to QBO, which is a poor future option.

I have put a line item on each invoice for the $0.27 Retail Delivery Fee with the following description:

Retail Delivery Fee: A new Tax on all deliveries because Colorado politicians unilaterally impose taxes without a vote of the citizens in violation of Colorado's Taxpayer's Bill of Rights by calling them Fees.

Since this is reported on a different form and is collected as a lump sum at the state level, it will be easy enough to run a report for the delivery fee collected.  

The real problem is, Aurora, Denver and other home rule cities are charging sales tax on the fee, bur no other jurisdictions are. How do we separate out a 3.75% tax on a $0/27 line item on a $1500 invoiice?

All, I can say is elections are coming up. Remember, they shut down your business as non-essential, They stole 2 years of your kids' education. Vote them out.

It can not be a % and you can't mix them can you?

I think I have found a way for me to show it.  I make it a line item on my invoice.  I wanted to see if on my job profit report, so I played around yesterday and found a way to have it show up, and I should be able to search for all of them when I pay my sales tax.  I have an item called retail delivery fee, under the cost section I put in cogs item, under the price I put in .27, under the account I used Tax Expense, and under inventory info. I put in sales tax adjustment.  That combination made it show up on the Job profitability report.  We will see what happens when I do my sale tax.