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In 2022, Colorado residents started paying a new 27 cent “doorstep” tax on every restaurant, grocery and e-commerce purchase delivered directly to their homes. Despite growing backlash from consumers and businesses in Colorado, other states are considering imposing similar harmful doorstep taxes.
Americans are already suffering from record inflation, supply chain shortages, and sky-high prices. A new tax on everyday items that people rely on will only exacerbate these issues and further raise costs for consumers.
Doorstep delivery is a critical, often overlooked part of everyday life in America. Families working long hours, elderly people, the disability community and those living in rural and remote localities depend on affordable and accessible delivery services for prescriptions and other essentials.
In Colorado, where doorstep taxes are in place, some localities have imposed their sales tax on top of the new doorstep tax, resulting in double taxation for consumers.
Doorstep delivery of food, groceries and packages supports millions of jobs in the U.S and helps to expand the customer base for businesses. Conversely, in Colorado where doorstep taxes are in place, small businesses have reported spiking compliance and accounting costs at a time when they can least afford it.
Delivery jobs employ a wide spectrum of Americans. Gig workers and delivery drivers earn less when consumers choose fewer deliveries.
Doorstep deliveries are an integral part of daily life for most Americans, and the delivery ecosystem is a growing and essential service for families across the U.S. The growth of doorstep delivery has provided a convenient and accessible way for consumers to receive essential items, food and various other goods, empowered small businesses and local restaurants to expand their customer bases and supported millions of jobs.
"A very large percentage of my customers will be affected by this. I’m sure once they end up on the website and they see an additional fee, I will be getting phone calls on that…There’s so many hats involved in being a business owner, it’s really hard to kind of start to have to educate my customers now that we have this whole new fee and it’s just a whole extra thing. And it’s very time consuming."
"This comes at a time when wages are increasing and many businesses are still grappling with supply chain and material issue…This is the absolute worst time to be assessing these fees."
"Coloradans are living with the highest inflation in 20 years, supply-chain problems, labor shortages and a whole host of new state regulations…At a time when Coloradans’ primary concerns are affordability, inflation and the economy, leveraging costly new fees that make doing business more difficult is a bad idea."
"In Salt Lake City Wednesday afternoon, KUTV 2News didn't find many who think a retail delivery fee is a good idea. ‘No way, no way, that should not happen,’ said Scott Clark."
"The new fee is occurring at a time of record-setting inflation, spiking home prices, and a general sense of how unaffordable living in Colorado has become, particularly in metro Denver. It's also occurring even as elected officials promise to do everything in their power to lift the economic burden on residents."
"Many small business owners in Colorado Springs are not happy with the new fee, and one small business owner tells KKTV 11 News that it’s costing her more than $100,000 to implement new software and systems around the fee for all her business."
No Doorstep Tax is a project of the Chamber of Progress.
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‘Delivery Fees’ Are the Newest Way for States to Raise Your Taxes
Real Clear Markets
Unnecessary delivery tax causes more harm than good to Minnesotans
MinnPost
State Delivery Taxes Could Bring More Traffic, More Stress, and Fewer Orders for Local Restaurants
Chamber of Progress
Letter: Minnesota Retailers to Legislators Opposing Delivery Tax
Minnesota Retailers Association
Confusion swirls as Colorado imposes new retail delivery fee, catching businesses by surprise
The Denver Gazette
Confusion, frustration over Colorado’s 27 cent retail delivery fee
KUSA – Denver, CO
Colorado Senate president willing to nix frustrating provision of retail delivery fee
Denver Business Journal
Colorado’s new retail delivery fee takes effect, drawing criticism
The Gazette
Taxing a fee: Some Colorado cities profit from controversial state delivery fee
The Denver Gazette
Group says new retail delivery fee will pose 'a significant burden' on Colorado business operations
The Center Square
New Colorado retail delivery fee causing issues for small businesses
KKTV - Colorado Springs, CO
Colorado is a clear outlier. No other state is seriously considering imposing delivery taxes. Below are just a few examples of how other states’ are addressing declining gas tax revenues.
"More than 7,000 Virginians have signed up to pay a fee for each mile they drive under a program launched this summer, putting the state at the forefront of a nationwide effort using new technology to prop up gas taxes that pay for roads.”
"The road usage charge program, a voluntary pilot program that started in January 2020, allows users to pay based on miles driven using a device in their car. Users are given the option to pay 1.5 cents per mile traveled or an annual flat fee of $120 for electric vehicles or $20 for gas hybrids. Per-mile payment stops when the accumulated total for the year reaches the flat fee, so customers can pay less if they drive less.”
"OReGO is a voluntary road-usage fee program that allows drivers to pay 1.8 cents per mile traveled. The project could also serve as a mechanism for collecting highway funding from electric vehicle drivers.”
"Massachusetts voters have approved a constitutional amendment to increase the tax rate on incomes over $1 million a year in order to generate more revenue for the Commonwealth's transportation and education programs.”
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