Question: Have states implemented or considered adoption of a retail delivery fee?
Note: The information below on retail delivery fees comes from CSG Midwest research done in response to a request for information made to the CSG Midwest Information Help Line. Throughout the year, individualized research assistance is available to state and provincial legislators, legislative staff and other officials from the region.
Answer: The rise of electric and hybrid vehicles has led policymakers to explore alternatives to the motor fuel tax, which often is the largest source of funding for states’ road, bridge and other transportation infrastructure projects. One potential alternative revenue stream: a fee or tax on certain types of retail deliveries.
As of February 2025, two states had implemented such a fee: Colorado and Minnesota.
- Colorado was the first state to do so, in 2021; its original fee was 27 cents per transaction. This fee was pinned to inflation and, as of early 2025, stood at 29 cents.
- Minnesota’s fee is 50 cents per delivery/transaction, regardless of the number of shipments.
Both states provide for exemptions. In Colorado, for instance, new businesses and retailers with less than $500,000 in sales the previous year do not have to pay the fee. Minnesota exempts retailers with less than $1 million in sales the previous year; additionally, no fee is charged for the delivery of a number of products, including drugs, medical devices, food, baby products, and deliveries by a food or beverage establishment.
Colorado’s fee became effective July 1, 2022, generating $75.9 million in tax revenue in the first year and a total of $218.2 million as of early 2025. Minnesota’s fee began being levied on July 1, 2024. As of early 2025, actual revenue numbers for that state were not yet available, but the state was projecting to collect $59 million in the first year. Colorado’s revenues are divided between six different funds focused on “clean transportation” priorities and state and local funding. Minnesota’s revenue is mostly distributed to cities and towns.
Other legislative activity on retail delivery fees
In several other U.S. states — including Nebraska, Ohio, Hawaii, Maryland, Mississippi, Nevada, New York and Washington — feasibility studies have been conducted and/or legislation has been introduced. In these states, the proposed delivery fees have ranged from 25 cents per transaction to 75 cents.
The state of Washington’s feasibility study was the most detailed and projected revenues of $45 million to $160 million per year, depending on variables such as inflation and the number of exemptions provided under the law. The same study estimated that the costs for implementing and administering such a fee would range from $159,400 in the fourth and fifth years to $540,000 in the second year. (The costs include the use of staff such as tax specialists, revenue auditors and IT personnel.)
Washington
HB 1125 (2023) created a budget proviso that set aside $300,000 from statewide fuel taxes for a study on how a retail delivery fee could be implemented. Topics included:
- Determining the annual revenue generation potential based on a range of fee amounts;
- Examining options for revenue distributions to state and local governments based upon total deliveries, lane miles or other factors;
- Estimating total implementation costs, including start-up and ongoing administrative costs; and
- Evaluating the potential impacts to consumers, including consideration of low-income households and vulnerable populations and potential impacts to businesses.
No legislation was introduced after the joint committee received the report. However, Sen. Marko Liias, committee chair, expected some version of the fee to be discussed during the 2025 legislative session.
Ohio
A 2023 analysis of alternative revenue sources for state transportation funding included a retail delivery fee. Ultimately, such a fee was not pursued because tax administrators identified the state’s sales tax on the cost of shipping and handling as an equivalent mechanism.
Nevada
The 2022 Nevada Sustainable Transportation Funding Study found that a parcel delivery fee of 74 cents per delivery would have generated $100 million in 2021. The authors said such a fee aligned with the study’s guiding principles of financial sustainability, sufficiency, user equity, flexibility, GHG emissions, transparency and efficiency. Ultimately, such a fee was not recommended at the state level due to regional governments’ interest in pursuing it on a local level.
Nebraska
LB 266 of 2024 (it did not pass) called for a 27-cent fee on every retail delivery of tangible personal property, with exemptions for:
- tangible personal property exempt from sales and use taxes,
- delivery by any entity that is tax-exempt,
- delivery by a new business or one that had less than $500,000 in sales the previous year, and
- delivery of tangible personal property that is a wholesale sale.
New York
Introduced in 2023, SB 5895 would have imposed a surcharge of 25 cents on every online delivery sale when such a delivery terminates within the city of New York. Funds would have been deposited into a special New York City infrastructure capital fund. Measures to implement fees on retail deliveries across the state also were introduced. None of these bills became law.
Maryland
HB 1215 was introduced in 2024 and did not pass. It called for imposition of a 50-cent fee on retail deliveries, per transaction. The fee would not have applied to the sale or purchase of tangible personal property that is exempt from the state’s sales and use tax. HB 1215 also called for a new fee on transportation network companies (for example, Uber and Lyft) — 50 cents per passenger trip.
Bills under consideration (as of February 2025)
- Maryland SB 321 and HB 352: Budget Reconciliation and Financing Act of 2025
- “A vendor or marketplace facilitator shall pay a retail delivery fee equal to 75 cents on each retail delivery transaction the vendor or marketplace facilitator makes in the state.”
- Hawaii SB 1124: Relating to Transportation
- The legislation establishes a 50-cent retail delivery fee on deliveries to fund safety projects; food and medical deliveries would be exempt from the fee
- Minnesota HF 5, HF 183, and SF 1058 would repeal the state’s retail delivery fee
- Colorado SB 25-139 and HB 25-1144 would repeal the state’s retail delivery fee
- Minnesota SF 878: Exempt liquid fuels delivery from the retail delivery fee
- Minnesota SF 41: Retail delivery fee modification
- Revises the definition of “retail delivery” in the state’s transportation statutes to exclude clothing and repeals the related definition of “clothing”
- Mississippi HB 530: Imposes a 35-cent delivery fee on retail transactions in Mississippi, with proceeds allocated to state transportation funds
| State | Legislation | Summary | Date/Applicability | Fee Amount | Exemptions | Revenue and Distribution |
|---|---|---|---|---|---|---|
| Colorado | SB 21-260 (2021) | Sustainability of the Transportation System: Concerning the sustainability of the transportation system in Colorado, and, in connection therewith, creating new sources of dedicated funding and new state enterprises to preserve, improve, and expand transportation infrastructure, develop the modernized infrastructure needed to support the widespread adoption of electric motor vehicles, and mitigate environmental and health impacts of transportation system use; expanding authority for regional transportation improvements; and making an appropriation. | Effective July 1, 2022. Applicable on all retail delivery by motor vehicles of tangible items subject to sales tax. | Retail Delivery Fee is made up of six different fees (community access, clean fleet, clean transit, general, bridge and tunnel, and air pollution mitigation). Totaled $0.27 in FY23, $0.28 in FY 24, and $0.29 in FY 25. | Retailers with sales of less than $500 thousand. New businesses. | FY 2022-23 projected fee impact = $75.9 million. Actual FY 2022-23 revenue = $75.9 million. Total revenues since effective date = $218.2 million. Revenue distributed to clean transportation priorities, state, and local funding. |
| Minnesota | HF 2887 (2023) | Transportation finance and policy bill. A fee is imposed on each retailer equal to 50 cents on each transaction that equals or exceeds the threshold amount involving retail delivery in Minnesota. The retailer may, but is not required to, collect the fee from the purchaser. If separately stated on the invoice, bill of sale, or similar document given to the purchaser, the fee is excluded from the sales price for purposes of the tax imposed under chapter 297A. | Effective July 1, 2024. Applicable on tangible property subject to sales tax or clothing of value greater than $100. | $0.50 per delivery. Imposed once per transaction regardless of the number of shipments necessary to deliver the items of tangible personal property purchased. | Retailers with sales of less than $1 million. Marketplace deliveries for sellers with sales of less than $100 thousand. Drugs. Medical devices, accessories, and supplies. Food, food ingredients, or prepared food. Baby products. Deliveries to a purchaser that is exempt from sales tax. Deliveries by a food or beverage establishment. | Minnesota Department of Revenue projects revenues of $59 million in FY25, $64.8 million in FY26, and $65.3 million in FY 27. Actual revenue numbers have not yet been released. Revenue distributed mostly to cities and towns. |