Two things are sure in life: death and taxes. Both are inevitable, and neither is any fun to think about. Great, this is going to be a conversation about taxes—say, what’s that new Netflix show about? Keep reading. You can find out later.
I usually don’t credit the government with forward-thinking, but Colorado’s delivery tax is an exception. What?! A new tax is a good thing? I’m not here to argue either way, but here’s what they were thinking, as written in their bill.
Gas taxes "fuel" road maintenance. Over the years, cars have become significantly more efficient. More efficiency means less gas tax revenue. Additionally, when Colorado introduced fuel taxes, they didn’t put clauses in the law to account for inflation. Road maintenance costs have increased, but revenue for this is decreasing.
The massive push for electric cars and increasing fuel prices have exacerbated the revenue gap. Thus, Colorado introduces the delivery tax. We will see many more states implement this in short order. However, most of the income for this is to be spent on clean energy, not highways. Either way, this idea is here to stay and grow.
- This fee is not taxable (similar to the bottle tax in California). When configuring it, ensure it is excluded from the taxable totals.
- The fee must be displayed on the order and order email. The customer needs to be well aware of the fact that they are paying this fee.
- The purchaser is required to pay the tax—but the seller is required to collect and remit it. That’s why we are having this conversation.
- You will need a separate Retail Delivery tax account. Yes, two returns. You will file this new return simultaneously as your sales tax return.
- This fee applies only to orders with at least one taxable item.
This is a fixed fee amount so you can’t just “add” a new sales tax rate. Magento has no concept of how to do this at an order level (bottle tax is a similar concept except that it’s done at the product level).
Amasty Extra Fee: this module allows you to create a fee that is applied to an order. You can select the Non-taxable tax class to prevent the fee amount from being taxed. You can configure this to only apply to a specific destination state.
Note: we have had many performance-related issues with Amasty modules. This one does way more than necessary—but it is what it is. Be judicious and deliberate with the modules you install. I am unaware of a better alternative.
Estimate: $39 + time to install, test, deploy