How to Handle Sales Tax for Colorado Retail Delivery Fee (RDF)

How to Handle Sales Tax for Colorado Retail Delivery Fee (RDF)

Release Date: 06/28/2022
Revised on : 6/23/2023
Version: 7.x & Up

Q - Colorado, in its ever-complicated tax system, has added a new fee effective 7/1/22 for all retail deliveries within their state of a whopping $0.27 that MUST be listed on the invoice to the customer as a separate line. I was planning to add this as a misc. item and add as a line item in COP, however, I am unsure how to direct that credit entry to go to a tax liability account rather than an income GL account. Any suggestions on how to accomplish this?

A - You need to do the following:
  1. Add a special product category: say RDF – Retail Delivery Fee, or anything you feel appropriate.
  2. Add a Misc. item that’s not taxable (so we don’t calculate tax on tax).  It should be a non-stock item with $0 unit cost. The unit price is $0.27. The product category is RDF. Note the fee is scheduled to increase to $0.28 on July 1, 2023.
  3. You need to go to COP -> Maintenance -> Product Category Location/Account File Maintenance, and add the records for RDF product categories and all possible locations that you may sell from. The Sales Account will be your tax liability account.
  4. During Order Entry, you need to make sure to add this misc. item to all Colorado orders.
See https://support.netcellent.com/portal/en/kb/articles/feature-colorado-sales-tax-retail-delivery-fee-rdf-support for more information on additional support available in version 8.5 and above.

Just FYI, we are currently working on an Avalara Sales Tax interface with Elliott 8.6 which will address this issue.  Before then, you can use the above method to work around the problem.


EMK

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