Retail fees on the move
The rise of digital commerce has led more states to consider a Retail Delivery Fee (RDF), a levy designed to supplement traditional tax structures and fund infrastructure. Colorado was the first to implement an RDF at 29 cents per order, applying to taxable retail deliveries, with exemptions for retailers with under $500,000 in annual sales. Minnesota followed with a 50-cent RDF for orders of $100 or more, requiring collection from businesses with at least $1 million in annual sales.
Other states exploring RDFs include Washington, Mississippi (30 cents), Hawaii (50 cents), and Nebraska (50 cents), Maryland (75 cents), and New York (25 cents). Challenges include flat fees instead of percentage-based rates and a lack of refund or credit mechanisms for returns.
Food for thought
Soaring inflation and skyrocketing grocery prices—like eggs surging 59% in a recent report—have pushed more states to reconsider grocery sales tax. Oklahoma and Kansas have eliminated theirs, Virginia reduced it, and Illinois plans to end it next year. Meanwhile, Tennessee, Utah, Alabama, Arkansas, Missouri, and Mississippi have introduced or debated similar tax cuts.
In Arkansas, Governor Sarah Huckabee Sanders aims to eliminate the state’s remaining 1/8th-cent grocery tax, calling it the "most regressive tax." However, critics warn that if federal funding declines, states could face budget shortfalls, and in places like Missouri, local governments fear lost revenue will shift the burden onto them.
Fire break for L.A.
After recent wildfires, California has extended the sales and use tax filing deadline for Los Angeles County taxpayers until April 30. The state’s Department of Tax and Fee Administration (CDTFA) said returns and payments due on or before January 31, 2025, are automatically extended for Los Angeles County taxpayers whose last return was for less than $1 million in sales and use tax on their 3Q24 returns.
Impacted business owners not subject to the automatic extension or who require additional relief are encouraged to contact CDTFA. Taxpayers who need copies of CDTFA tax records can receive replacements free, and help’s available for updating account information such as changed addresses.
Swipe out
An Arizona lawmaker is sponsoring a bill to remove swipe fees on sales taxes. In an op-ed for Chandler Independent, Representative Jeff Weninger, a Republican, says HB 2629 would relieve the state’s small businesses from swipe fees (aka interchange fees) when collecting sales taxes. A similar bill is being considered in Colorado.
“These fees … are charged by credit card companies on every transaction. They can range from 1% to 5% per transaction, and businesses have no ability to negotiate them,” Weninger writes. “The fees aren’t just charged on the cost of goods and services — they’re also tacked onto the sales tax businesses must collect and remit to the state.” In 2023 alone, Arizona businesses paid over $217 million in swipe fees on sales taxes,” Weninger adds, “a fee on a fee that never should have existed in the first place.
All that glitters
Colorado has revised information to clarify that the sale, storage, use or consumption of coins and precious metal bullion are exempt from state and state-administered local sales and use taxes.
Other numismatic items that are not coins or precious metal bullion are not exempt, including paper money, tokens, checks, and wampum. Coins qualify if they are monetized bullion or other forms of money; are manufactured from gold, silver, platinum, palladium or other such metals; and are designated as a medium of exchange under the laws of Colorado, the United States, or any foreign nation.
