Does Colorado's retail delivery fee apply when I offer free shipping?

Yes. The Department of Revenue says the fee applies even when shipping is free to the purchaser, because it is based on the sale containing at least one item that is taxable for state sales or use tax. The retailer or marketplace facilitator that collects the sales tax is the one liable for it.

How much is the fee and does it change?

The Department's return lists 0.31 dollars for July 2026 through June 2027. Earlier periods were 0.28, 0.29 and 0.28 dollars, and the Department says the fee may increase each July to adjust for inflation. It is charged once per sale, not per shipment.

Is my small store exempt?

Retailers with retail sales of 500,000 dollars or less during the prior calendar year are exempt from the fee on deliveries in the following year, according to the Department. A store with no sales in the prior year is exempt until 90 days after its sales pass 500,000 dollars. Confirm your own case with the Department; this is not tax advice.

Do I need to collect Colorado sales tax from outside the state?

Not if your sales into Colorado are under 100,000 dollars in both the current and the previous calendar year, according to the Department's Sales Tax Guide. The state rate is 2.9 percent, and certain home-rule cities administer their own sales taxes, so a delivery address can carry a different local tax than the state's.

Shipping into Colorado: the retail delivery fee and your free shipping offer

Colorado is the state where a free shipping banner and a fee line can sit side by side. The state charges a retail delivery fee on deliveries by motor vehicle when the sale includes at least one item subject to state sales or use tax, and the Department of Revenue says the fee applies even when shipping is free to the purchaser. It is one fee per sale, not per package, the amount may change each July, and stores with 500,000 dollars or less in retail sales the prior calendar year are exempt. That makes Colorado a rule about wording and bookkeeping rather than a price cap, which is why this page builds the offer plan around what your free shipping promise actually covers.

Updated October 10, 2026 · 11 sourced facts

Photo: Daderot, Public domain via Wikimedia Commons

A free shipping offer plan for Colorado orders

Before you promise free shipping to Colorado
Decide whether your store is under the line. If retail sales were 500,000 dollars or less last calendar year, the fee does not apply to this year's deliveries. If they were more, a free shipping banner still leaves you responsible for the fee on each qualifying sale.
Source: Colorado Department of Revenue: Form DR 1786, Retail Delivery Fee Return (05/27/26)
When you set the threshold
Add the fee to the shipping cost in your threshold math. At 0.31 dollars it is small next to the carrier charge, but it is one fee per sale, so it is a fixed cost that does not shrink when the order grows.
Source: Colorado Department of Revenue: Form DR 1786, Retail Delivery Fee Return (05/27/26)
When you write the banner
Say what free covers. A line such as free shipping on orders over a set amount, plus a note that Colorado's retail delivery fee may still apply, matches what the Department says: the fee applies even when shipping is free. Ask the Department whether and how you may show the fee to the buyer before you change checkout.
Source: Colorado Department of Revenue: Retail Delivery Fee FAQs
Each July
Check the Department's rate table. The fee may change each July, and it went from 0.28 dollars to 0.31 dollars between the 2025 and 2026 periods, so update the number in your cost model on July 1.
Source: Colorado Department of Revenue: Form DR 1786, Retail Delivery Fee Return (05/27/26)

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Questions merchants ask

Does Colorado's retail delivery fee apply when I offer free shipping?: Yes. The Department of Revenue says the fee applies even when shipping is free to the purchaser, because it is based on the sale containing at least one item that is taxable for state sales or use tax. The retailer or marketplace facilitator that collects the sales tax is the one liable for it.
How much is the fee and does it change?: The Department's return lists 0.31 dollars for July 2026 through June 2027. Earlier periods were 0.28, 0.29 and 0.28 dollars, and the Department says the fee may increase each July to adjust for inflation. It is charged once per sale, not per shipment.
Is my small store exempt?: Retailers with retail sales of 500,000 dollars or less during the prior calendar year are exempt from the fee on deliveries in the following year, according to the Department. A store with no sales in the prior year is exempt until 90 days after its sales pass 500,000 dollars. Confirm your own case with the Department; this is not tax advice.
Do I need to collect Colorado sales tax from outside the state?: Not if your sales into Colorado are under 100,000 dollars in both the current and the previous calendar year, according to the Department's Sales Tax Guide. The state rate is 2.9 percent, and certain home-rule cities administer their own sales taxes, so a delivery address can carry a different local tax than the state's.

Shipping into the state

Colorado covers 103,642 square miles of land. The fee depends on the sale containing a taxable item and the delivery being by motor vehicle, and free shipping does not remove it. If your store is below the retail sales line, the exemption is yours; above it, plan for one fee per sale and one return filed even in quiet months.

Source: Colorado Department of Revenue: Retail Delivery Fee FAQs

Source: Colorado Department of Revenue: Form DR 1786, Retail Delivery Fee Return (05/27/26)

The year at a glance

Cities in Colorado

BoulderSundance moves to Boulder for Jan. 21 to 31, 2027. Dates, the city's 3.86 percent tax and a custom gift offer for festival week, race day and move-in.
DenverDenver collects its own 5.15 percent sales tax and wants a license from out-of-city sellers. Rules, the January stock show and a today's offers plan.

Facts and sources

Colorado imposes a retail delivery fee on retail sales of tangible personal property delivered by motor vehicle to a location in the state, and the sale must include at least one item subject to state sales or use tax for the fee to apply.
Colorado Department of Revenue: Form DR 1786, Retail Delivery Fee Return (05/27/26) (accessed October 10, 2026)
The Department of Revenue answers yes to the question of whether the retail delivery fee applies when shipping is free to the purchaser, because the fee is based on the sale containing at least one item taxable for state sales or use tax.
Colorado Department of Revenue: Retail Delivery Fee FAQs (accessed October 10, 2026)
Each retail sale transaction is considered a single retail delivery regardless of how many shipments are actually needed to complete the sale, so a split shipment carries one fee, not one per box.
Colorado Department of Revenue: Form DR 1786, Retail Delivery Fee Return (05/27/26) (accessed October 10, 2026)
The fee was 0.28 dollars from July 2023 through June 2024, 0.29 dollars from July 2024 through June 2025, 0.28 dollars from July 2025 through June 2026 and is 0.31 dollars from July 2026 through June 2027.
Colorado Department of Revenue: Form DR 1786, Retail Delivery Fee Return (05/27/26) (accessed October 10, 2026)
The Department says the retail delivery fee may increase each July to adjust for inflation.
Colorado Department of Revenue: Form DR 1786, Retail Delivery Fee Return (05/27/26) (accessed October 10, 2026)
Retailers with retail sales of 500,000 dollars or less during the prior calendar year are exempt from the fee on deliveries during the subsequent year, and a retailer with no sales in the prior year is exempt until the first day of the period after 90 days after its retail sales exceed 500,000 dollars in the current year.
Colorado Department of Revenue: Form DR 1786, Retail Delivery Fee Return (05/27/26) (accessed October 10, 2026)
The retailer or marketplace facilitator that is liable to collect and remit Colorado sales or use tax on the items sold is also liable for the retail delivery fee, and a return must be filed even in a period with no retail deliveries and no fees due.
Colorado Department of Revenue: Form DR 1786, Retail Delivery Fee Return (05/27/26) (accessed October 10, 2026)
The return has a line for any fee collected from the purchaser in excess of the amount due, and states that all fees collected are required to be remitted to the Department.
Colorado Department of Revenue: Form DR 1786, Retail Delivery Fee Return (05/27/26) (accessed October 10, 2026)
Colorado state sales tax is imposed at a rate of 2.9 percent, and the Department does not collect sales taxes for certain home-rule cities that instead administer their own.
Colorado Department of Revenue: Sales Tax Guide (accessed October 10, 2026)
A retailer with no Colorado physical location is exempt from state sales tax licensing and collection if its sales into Colorado in both the current and previous calendar years are less than 100,000 dollars.
Colorado Department of Revenue: Sales Tax Guide (accessed October 10, 2026)
Colorado has 103,642 square miles of land area.
U.S. Census Bureau: State Area Measurements (2010) (accessed October 10, 2026)

Not tax advice. Confirm current rules with the state revenue department before you rely on a date or an exemption.

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