Repeal Retail Delivery Fees

What This Bill Actually Does

Back in 2022, Colorado rolled out the Retail Delivery Fee. If you bought anything online or ordered delivery that included a taxable item, the state tacked on a small fee—originally 27 cents, now up to 29 cents due to inflation. The original idea was to offset the wear and tear that delivery vehicles put on our local roads, and to fund environmental initiatives like electric vehicle charging stations and clean transit fleets.

While 29 cents sounds like pocket change, the headache it created was anything but small. Every single business delivering to a Colorado address—whether it’s a local boutique shipping a sweater across town or a massive tech giant sending a charging cable—had to update their point-of-sale systems, track the fees, and remit them to the Department of Revenue. It became a notoriously frustrating piece of red tape, especially for small mom-and-pop shops that suddenly needed enterprise-level accounting software just to legally mail a t-shirt or deliver a hot pizza.

Enter HB26-1266. This bill proposes a straight-up repeal of the Retail Delivery Fee. It doesn't just tweak the rules or add new exemptions for certain businesses—it simply wipes the fee off the books entirely. Because we are looking at the newly introduced version without the final drafted text, the exact phase-out timeline isn't locked in yet, but the core mission is crystal clear: kill the delivery fee, reduce costs for consumers, and lift the compliance burden off Colorado retailers.

What It Means for You

Let's be honest, saving 29 cents on your next DoorDash order isn't going to pay your mortgage. But if you're someone who relies heavily on grocery deliveries, orders a lot of household supplies online, or gets frequent packages for a home business, those nickels and dimes do add up over the course of a year. More importantly, getting rid of this fee removes that tiny moment of annoyance at checkout when you wonder exactly what you're paying for.

However, there is a flip side to consider for your daily commute. This fee wasn't just dropping into a black hole; it was actively funding transportation infrastructure and clean air projects in your neighborhood. We’re talking about pothole repairs, expanded public transit routes, and subsidies for electric school buses. If this fee disappears, the state will have to find the money elsewhere—or significantly scale back those projects. You might save some cash on your Amazon orders, but you could end up hitting a few more bumps on your drive to work.

This is a highly visible bill that will move fast because absolutely everyone has an opinion on it. If you feel strongly one way or the other, here is what you can do right now:

• Contact your local representative: Tell them if you prefer cheaper deliveries or better-funded roads. Keep it brief, polite, and personal to your daily life.
• Watch the committee calendar: The bill is sitting in the Transportation, Housing & Local Government Committee. You can sign up online to give public testimony (even over Zoom) when the hearing date is set.

What It Means for Your Business

If you own a retail store, a restaurant, or an e-commerce brand in Colorado, you are probably already cheering. The Retail Delivery Fee has been a massive thorn in the side of the business community since day one. Even though the consumer technically pays the fee, the actual cost of compliance falls entirely on your shoulders. Updating your e-commerce platform, adjusting your checkout flow, training staff, and filing separate tax lines with the state has cost many businesses thousands of dollars in administrative time just to collect pennies. For local restaurants delivering hot food, it’s been an ongoing logistical nightmare.

If HB26-1266 passes, the regulatory relief will be significant. You can strip out those messy checkout plugins, simplify your point-of-sale software, and clean up your state tax filings. However, don't jump the gun just yet. The state will likely outline a specific effective date—often July 1st or January 1st following the legislative session—meaning you still need to legally collect and remit the fee for now. If you’re a general contractor or a tradesperson who orders materials directly to job sites, you’ll also see a slight reduction in your material overhead, simplifying your own expense tracking.

Don't assume this repeal is a done deal. Revenue bills face steep climbs at the Capitol. Here is your playbook for the week:

• Call your POS provider: Check how quickly your point-of-sale (like Toast or Square) or e-commerce software (like Shopify) can adapt if the fee is abruptly removed. You don't want to over-collect by accident once the law changes.
• Call your industry association: Whether you're in the Colorado Restaurant Association or a local Chamber of Commerce, ask them if they are actively lobbying for this bill. Let them know how much time and money the current fee costs you.
• Keep filing for now: Do not stop remitting the delivery fee on your current tax cycle. The law is still very much in effect and the Department of Revenue will still audit for it.

Follow the Money

Here is the part that makes or breaks the bill: the price tag. While the official Fiscal Note for HB26-1266 hasn’t been published yet by nonpartisan staff, we don't need it to know the numbers are massive. The Retail Delivery Fee generates tens of millions of dollars annually—often upwards of $70 million to $80 million a year. This money is legally earmarked for the State Highway Fund, bridge repairs, and several enterprise funds dedicated to clean transit and electric vehicle infrastructure.

Repealing this fee blows a massive hole in the state's transportation budget right when inflation is already making asphalt, concrete, and construction labor more expensive. Lawmakers in favor of the repeal argue that state revenues are healthy enough to absorb the hit, or that the administrative burden on businesses simply isn't worth the cash. Opponents will point out that cutting this revenue stream will force local governments to delay critical road repairs. The debate in the Capitol won't be about whether the fee is annoying—it will be entirely about how to replace $80 million a year.

Where This Bill Stands

Representative D. Woog introduced HB26-1266 on February 19, 2026. Right now, it has been assigned to the House Transportation, Housing & Local Government Committee. This is the first major hurdle. The committee chair will need to schedule a hearing, which will likely draw hours of testimony from frustrated business owners on one side and budget-conscious transportation advocates on the other.

What are its actual chances? Honestly, it’s going to be an uphill battle. While repealing an unpopular fee is a great talking point, the legislature relies heavily on the revenue it generates. Similar efforts to repeal or soften the fee have happened in past sessions, usually resulting in minor exemptions rather than a total kill. Keep a close eye on the committee calendar—if this bill actually makes it out of committee, it proves there is serious, bipartisan appetite for regulatory relief this year.