Support for Colorado Retail Delivery Fee (CORDF)

History

The State of Colorado passed legislation (CO Senate Bill 21-260) that imposes a transaction delivery fee on retail transactions (online/phone/in-store) which are ordered on or after July 1, 2022, and then delivered by a motor vehicle to a Colorado address. The amount applied by the fee is $0.27, effective as of July 1, 2022.

Note:

This amount is subject to change per state law and/or monthly IDI tax updates.

IDI’s June 2022 tax release included the Colorado State Retail Delivery Fee (CORDF). Due to issues found with the IDI system assessing and applying the new fee, IDI subsequently disabled it.

Solutions Overview

To support the CORDF when it is disabled in Tax Management, a retail product (SKU) that represents the CORDF and its prevailing charge ($0.27 or higher as dictated by state law) can be added to a retail transaction, when appropriate. This solution is required when applying the CORDF for a retail transaction. Guidelines for this solution are provided in the section for Accessing CORDF for Retail Transactions.

With IDI platform version 23.8, the Tax Management solution was enhanced with new settings for assessing a flat fee when no per-line tax options are used. CORDF is configured this way in IDI Tax Management. For billing transactions that require the CORDF be applied, you’ll need to enable the CORDF tax and select a specific one of these flat fee options.

Note:

This solution does not support the CORDF in retail scenarios. Guidelines for using this billing solution are provided in Accessing CORDF for Billing Transactions.

Accessing CORDF for Retail Transactions

This solution involves adding a retail product (SKU) that represents the CORDF (and its prevailing charge) to a retail transaction.

Notes:

• This solution requires the CORDF (or equivalent tax) remains disabled in Tax Management.

• A report is available to identify orders in Colorado where the CORDF should be charged. Contact your IDI Account Manager to make this report available in your IDI environment.

Implementation Steps

• Create a retail product (SKU) in your IDI Desktop Client Product Catalog which is mapped to a Tax Class of Shipping Charge. Configure the SKU with a clear description like State (e.g. Colorado) Retail Delivery Fee and a charge (e.g., $0.27) to apply and show the CORDF on the receipt.

• Add the SKU to the transaction when it requires the fee to be applied per below guidelines.

Guidelines for Adding or Excluding the CORDF SKU

• Add the CORDF SKU to a transaction that involves a delivery to a Colorado address, and the transaction contains one or or more items of tangible personal property. Regardless of the quantity of items, it is considered a single transaction and the CORDF is to be imposed only once per transaction.

• Don’t add the SKU to a transaction when:

• The address where the item being delivered is not in Colorado.

• The customer or all items applicable to the CORDF on the transaction are tax exempt or free (Unit price/Charge = $0).

• It is an in-store purchase with no delivery by motor vehicle.

Accessing CORDF for Billing Transactions

This solution involves:

• Configuring a billing product (SKU) to represent a delivery or shipment that requires the CORDF to be applied.

• Enabling and configuring the CORDF in Tax Management.

  Note:

  Enabling the CORDF for billing purposes will not impact the calculation of a retail transaction’s tax amounts.

• Assigning the billable catalog item (SKU) associated to the CORDF (or other tax), as needed, on a transaction. At billing, the tax amount is determined and applied on the customer’s invoice according to the CORDF’s configuration.

Implementation Steps

• Configure the billing product (SKU) in the IDI Desktop Client Product Catalog with.

  • a Tax Class of Shipping Charge. This matches the Tax Class for the CORDF (or equivalent tax.

  • a charge amount that is not zero.

    Note:

    Products with a charge amount of $0 are not taxed by the billing process.

• Configure the CORDF (or equivalent tax) in IDI Desktop Client Tax Management > View > Taxes.

  • On the Add/Edit tax form Details tab confirm the tax is enabled (end-date removed or configured as a time in the future) and Tax Class = Shipping Charge.

    

  • On the Rates and Tiers tab, in the Tax Rates section configure the tax as a flat fee tax and select option # 3.  This directs the IDI tax engine to look for billing items (SKUs) with an assigned tax class that matches the tax’s configuration. If there is at least one item with a matching tax class on an active account, a single instance (flat fee) of the tax will be assessed to that account. If an active account has no items that match the tax’s configuration, the tax will NOT be assessed to that account/billing invoice.

    

    Note:

    Do not select any options in the left panel (This tax is a/Per Line Tax Configuration).

Free Shipping Best Practice

A recommended best practice for service providers who provide free shipping is to apply a Billing Discount to achieve the desired free amount. However, if free shipping is supported by a SKU with a $0 charge, an additional and specific SKU is needed to represent the billed amount from the applied tax/fee.