Collect Retail Delivery Fees on Shopify — Automatically
Several US states now require retailers to collect a mandatory retail delivery fee on every order delivered to a customer. Failing to collect it puts you out of compliance. Canteen adds the fee automatically at checkout — no manual work, no missed collections.
What Is a Retail Delivery Fee?
A retail delivery fee is a state-mandated charge added to taxable retail orders that are delivered to a customer's address. Unlike shipping charges (which cover your carrier costs), the retail delivery fee is a government-imposed compliance fee that retailers are legally required to collect and remit to the state.
It's Mandatory — Not Optional
States that have enacted retail delivery fees require merchants to collect them on qualifying orders. Failing to collect and remit these fees exposes your business to penalties, back taxes, and interest — even if the oversight was unintentional.
The fee is typically small per order (under $1), but across hundreds or thousands of deliveries, the total obligation adds up quickly. The risk isn't the fee amount — it's the compliance gap if you're not collecting it.
States With Retail Delivery Fee Requirements
Multiple states have passed retail delivery fee legislation, with more expected to follow. Here's what's active:
Colorado
$0.29 per delivery
One of the first states to enact a retail delivery fee. Applies to retail sales of tangible personal property delivered by motor vehicle to Colorado customers.
Minnesota
$0.50 per delivery
Minnesota's retail delivery fee applies to taxable retail deliveries. The fee is among the highest in the country at $0.50 per order.
More States Coming
Legislation expanding
Additional states are actively reviewing retail delivery fee legislation. If you sell nationally, it's worth staying ahead of compliance requirements.
📋 Always Verify Current Requirements
Fee amounts and qualifying rules change. Always consult your state's department of revenue or a tax advisor to confirm current retail delivery fee requirements for your business. Canteen makes it easy to update fee amounts when rules change.
How Canteen Automates Retail Delivery Fee Collection
Canteen adds a fixed fee to qualifying orders at checkout. You configure the fee amount and the conditions under which it applies — Canteen handles the rest on every order automatically.
- ✓ Fixed-amount fees — Set the exact dollar amount (e.g., $0.29 or $0.50) to match your state's required retail delivery fee.
- ✓ Automatic at checkout — The fee appears as a clear line item at checkout so customers see exactly what they're paying.
- ✓ Works on Online Store — Canteen applies fees automatically on all Shopify online checkout orders — no manual order editing required.
- ✓ Easy updates — If the state changes the fee amount, update it once in Canteen. It takes effect on all future orders immediately.
- ✓ Clear fee labeling — Name the fee exactly as required (e.g., "Retail Delivery Fee") so customers and records are crystal clear.
Stay Compliant
Every qualifying delivery, every time
Set Up Retail Delivery Fee Collection in 3 Steps
Most merchants are compliant and collecting in under 10 minutes.
Create a Fee Rule
Open Canteen in your Shopify admin, create a new fee collection. Set the fee type to fixed amount and enter the required dollar amount (e.g., $0.29 for Colorado). Name it "Retail Delivery Fee."
Configure Your Conditions
Set the fee to apply to orders with a shipping address. If you sell in multiple states, work with your tax advisor on the appropriate setup for your business.
Activate & Stay Compliant
Enable the rule. From that point forward, every qualifying delivery order automatically includes the retail delivery fee at checkout — collected, documented, ready to remit.
Start collecting retail delivery fees automatically — no dev work required.
Install Canteen Free
The Cost of Not Collecting
Retail delivery fees are a statutory obligation, not a suggestion. Here's what non-compliance can look like:
💸 Back-Fee Assessments
States can assess uncollected retail delivery fees retroactively. Across thousands of orders, even a $0.29 fee adds up to significant back-tax liability — plus interest.
⚠️ Penalties & Interest
Most state tax authorities impose penalties and interest on late or missing remittances. A small per-order fee becomes a big problem at scale if left uncollected for months or years.
🔍 Audit Exposure
As retail delivery fees are a relatively new obligation, state tax auditors are actively reviewing merchant compliance. Having documented collection through Canteen protects you.
✅ The Easy Fix
Canteen turns a compliance headache into a 10-minute setup. The fee is collected transparently, documented on every order, and your exposure is eliminated going forward.
Frequently Asked Questions
Canteen applies fees based on the rules you configure. You set the conditions — such as all orders with a delivery address — and Canteen applies the fee automatically. Work with your tax advisor to determine the right conditions for your specific situation.
Just update the amount in your Canteen fee rule. Changes take effect immediately on all future orders. No need to edit products or reconfigure checkout.
Generally, retail delivery fees only apply to orders delivered by a carrier — not to in-store pickup or local pickup orders. Colorado's law, for example, specifically covers deliveries by motor vehicle. Canteen lets you configure your rule accordingly, but confirm with your tax advisor for your specific situation.
Currently, only a handful of states have enacted retail delivery fee laws. You only need to collect and remit the fee where your business has the obligation. We recommend consulting a sales tax advisor for guidance on your specific nexus and compliance requirements.
In Colorado, the retail delivery fee is not subject to sales tax. In Minnesota, it may be treated differently. Your tax advisor or state revenue department can clarify how to handle the fee on your tax returns.
Related Reading
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