Retail Delivery Fee on Shopify: What It Is and How to Collect It
If you sell physical goods and offer delivery to customers in certain US states, you may be legally required to collect a retail delivery fee on top of your normal shipping charges. For many Shopify merchants, this comes as a surprise — and an unwelcome compliance headache.
This guide breaks down what retail delivery fees are, which states have them, how much they cost, and how to collect them correctly through your Shopify store without building custom workarounds.
What Is a Retail Delivery Fee?
A retail delivery fee is a small, state-mandated charge added to qualifying retail deliveries. It’s distinct from sales tax and separate from your shipping rate — think of it as an environmental or infrastructure fee that the state requires merchants to collect and remit.
Most retail delivery fees apply to deliveries of taxable tangible goods made by motor vehicle to a consumer’s address within the state. If a customer buys something from your Shopify store and you ship it to them in a covered state, you may be required to collect the fee at checkout.
Importantly, the fee is typically a flat amount per transaction — not a percentage — which makes it straightforward to calculate but easy to miss if you’re not set up for it.
Which US States Have Retail Delivery Fees?
As of early 2026, a handful of US states have enacted retail delivery fee laws, with more potentially in the pipeline. Here’s what merchants need to know:
Colorado
Colorado was the first state to implement a retail delivery fee, and it remains the most established example. The fee applies to deliveries of tangible personal property (with some exemptions) made to Colorado addresses.
- Fee amount: $0.29 per qualifying delivery (as of 2026 — the amount has adjusted slightly since the law’s 2022 inception)
- Who collects it: Retailers with Colorado nexus who make deliveries by motor vehicle
- Exemptions: Deliveries where all items are exempt from Colorado sales tax are generally not subject to the fee
Colorado’s fee is collected by the retailer and remitted to the state. It must appear as a separate line item on the receipt or invoice.
Minnesota
Minnesota introduced its own retail delivery fee structure with a slightly different approach:
- Fee amount: $0.50 per qualifying retail delivery
- Threshold: Applies to retailers with at least $100,000 in Minnesota sales in the prior 12 months
- Effective date: Phased in starting 2024
- Exemptions: Deliveries of food, medications, and certain other exempt items may not be subject to the fee
Minnesota’s fee is meant to fund transportation infrastructure. Like Colorado, it requires separate line-item disclosure.
Other States to Watch
Several other states have considered or are actively debating retail delivery fee legislation. While no other state has a fully enacted, broadly applicable retail delivery fee at this writing, the trend is clear: more states are looking at this mechanism as a revenue tool.
Merchants selling nationally should monitor state legislative developments — particularly in high-volume states like California, New York, and Washington, which have large delivery volumes and ongoing infrastructure funding debates.
Who Has to Collect the Fee?
Not every Shopify merchant is automatically subject to these fees. Typically, the fee applies when:
- You have nexus in the state — either economic nexus (based on sales volume) or physical presence
- The delivery is by motor vehicle to a location within the state
- The order contains taxable goods (orders composed entirely of exempt items are often excluded)
If you’re a small seller below the state’s sales threshold, you may be exempt. But if you’ve crossed economic nexus thresholds for states like Colorado or Minnesota, the retail delivery fee likely applies to your deliveries there.
When in doubt, consult a sales tax professional. Compliance requirements vary by state, and the penalties for non-collection can include back fees plus interest.
How to Collect Retail Delivery Fees on Shopify
Here’s where many merchants get stuck. Shopify’s native checkout isn’t built to add arbitrary flat fees based on the destination state of an order. You can’t easily say “add $0.29 to every order going to Colorado” without custom code or a third-party app.
Option 1: Manual Line Items (Not Recommended)
Some merchants try to add retail delivery fees manually — editing orders after the fact or using draft orders with added line items. This is error-prone, time-consuming, and creates customer service friction when fees appear unexpectedly post-checkout.
Option 2: Adjusted Shipping Rates (Problematic)
Others bake the fee into their shipping rates for specific states. This technically collects the revenue but creates compliance issues: the fee isn’t disclosed separately as required by law, and it may confuse customers.
Option 3: Use Canteen (The Right Way)
Canteen is a Shopify app built specifically for adding fees and deposits to orders at checkout. With Canteen, you can set up a retail delivery fee that:
- Appears as a clear, separate line item at checkout
- Is applied to all qualifying orders automatically
- Has a custom name (e.g., “Colorado Retail Delivery Fee”) so customers understand exactly what they’re paying
- Can be configured as a flat amount per order — exactly how these state fees work
Setting Up a Retail Delivery Fee with Canteen
- Install Canteen from the Shopify App Store
- Create a new fee in the Canteen dashboard
- Set the fee type to “flat fee per order”
- Enter the fee amount (e.g., $0.29 for Colorado, $0.50 for Minnesota)
- Name the fee clearly (e.g., “Colorado Retail Delivery Fee”)
- Activate the fee — it will appear at checkout for all orders
Because Canteen integrates directly with Shopify’s checkout, the fee shows up as a named line item — meeting the disclosure requirement that most state laws impose.
Compliance Tips for Merchants
Getting the fee collection right is only half the equation. Here’s what else to keep in mind:
Separate Line-Item Disclosure
Both Colorado and Minnesota explicitly require the fee to appear as a separate line item on customer invoices and receipts. Folding it into your shipping cost or displaying it vaguely doesn’t meet this requirement. With Canteen, you control the fee name and it displays cleanly at checkout and in order confirmations.
Remitting the Fee to the State
Collecting the fee from customers is one thing — remitting it to the state is another. You’ll need to include the fee in your state tax filings, typically reported on a separate line from sales tax. Work with your accountant or tax software to ensure the fee is captured in your reporting.
Keep Records
Like any tax-related obligation, documentation matters. Keep records of:
- Which orders had the fee applied
- Total fees collected by period
- Remittance records submitted to the state
Canteen’s order history makes it easy to track which orders included the fee, supporting your reporting needs.
Stay Current
State fee amounts and thresholds can change. Colorado’s retail delivery fee, for example, has been adjusted since it was first introduced. Set a calendar reminder to verify you’re collecting the correct amount at the start of each year.
Frequently Asked Questions
Do I charge the fee on top of shipping?
Yes. The retail delivery fee is separate from your shipping charge. A customer might pay $5.99 for standard shipping plus a $0.29 retail delivery fee — they’re distinct charges.
Is the retail delivery fee taxable?
In most cases, no — the fee itself is not subject to sales tax. But confirm with your tax advisor, as state guidance can differ.
What if my customer picks up in store?
Retail delivery fees generally apply only to deliveries made by motor vehicle to a consumer’s location. In-store pickup transactions are typically exempt.
Can I absorb the fee instead of passing it to customers?
Technically yes — you’re not required to pass it to the customer. But you’re still required to remit it to the state. Most merchants choose to collect it at checkout rather than eat the cost.
The Bottom Line
Retail delivery fees are a growing compliance obligation for US merchants delivering to certain states. Colorado and Minnesota are the pioneers, but the trend toward this type of fee is likely to continue.
The good news: collecting the fee doesn’t have to be complicated. With a tool like Canteen, you can add a clearly labeled, flat-fee line item to your Shopify checkout in minutes — staying compliant without custom code or clunky workarounds.
Ready to get set up? Install Canteen from the Shopify App Store and configure your retail delivery fee today.
