This guide is for Shopify merchants who ship orders by motor vehicle into U.S. states that charge a retail delivery fee (currently Colorado and Minnesota) and want a plain-language starting point before diving into official state tax guidance.

Use it to understand what these fees are, why they matter for ecommerce, and how you can show them clearly at checkout with an app on Shopify.

This guide is for general information, not legal or tax advice. State rules change, and your exact obligations depend on your products, sales volume, and where your customers are located. Always confirm details with your tax advisor and the latest guidance from each state’s department of revenue.

Quick Answer: What’s the Easiest Way to Charge U.S. Retail Delivery Fees on Shopify?

Some U.S. states now require retailers to collect a small retail delivery fee on certain orders of taxable ​​tangible personal property delivered by motor vehicle into the state. 

Currently, Colorado charges a per-delivery fee made up of several components that are updated each year, and Minnesota has introduced a 50-cent “Road Improvement and Food Delivery Fee” on qualifying retail deliveries of at least 100 dollars to Minnesota addresses.

Shopify does not have a built-in way to add a separate “Retail Delivery Fee” line item on orders that meet these state-specific rules. The simplest, most practical and useful approach for many merchants is to use an app like Magical Product Fees. 

It takes the pain out of applying and disclosing the fee by automatically adding a clearly labeled per-order fee when orders ship to specific states, so customers see the charge broken out at checkout and on their receipts. With this in place, you’ll just need to handle evaluating the more nuanced eligibility rules and edge cases with your tax advisor and internal processes.

Detailed Answer: How to Charge Colorado and Minnesota Retail Delivery Fees on Shopify With Magical Product Fees

Over the past few years working on Magical Product Fees, our team has helped merchants set up a lot of similar “small but important” regulatory fees on Shopify, like bottle deposit fees, eco-participation fees in France, and excise taxes. Retail delivery fees in Colorado and Minnesota follow the same basic pattern: a statutory per-order charge that has to be calculated correctly, shown as its own line on the receipt, and kept in sync with changing state rules.

In this section I will walk through how we would approach these fees in Shopify based on that experience, combined with each state’s latest guidance.

Why retail delivery fees matter for your Shopify store

For many merchants, retail delivery fees start as a small line in state tax news and quickly turn into a recurring operational problem:

  • Every qualifying delivery into a fee-state can carry an extra charge, which adds up when you ship hundreds or thousands of orders per month.
  • The fee is separate from sales tax, with its own reporting and thresholds, so “just letting the tax engine handle it” is not always enough.
  • States like Minnesota tie the fee to order value thresholds and sales of taxable tangible personal property, making it more complex than a simple “all orders to this state pay X cents” rule.

If you ignore these requirements, you risk under-collecting and having to pay the fee out of your own margin later, plus potential penalties. If you handle them in a clumsy way, you create confused customers and messy records.

Why manual Shopify workarounds cause problems

Because Shopify product fees–like “retail delivery fees”–cannot be added natively, merchants often experiment with improvised solutions that seem easy at first but become hard to maintain:

  • Raising product prices across the board: You can increase prices to cover the fee, but that makes you look more expensive in every state instead of only in Colorado or Minnesota. It also does not give you a separately stated “Retail Delivery Fee” line item for receipts.
  • Hiding the fee in shipping or handling: Folding the amount into a generic “shipping” or “handling” charge makes it hard for customers, staff, and auditors to see what portion of the total is a regulatory fee versus actual shipping cost. It also complicates future fee updates, since you might need to change shipping rates every time a state adjusts the fee.
  • Asking customers to add a “delivery fee” product manually: Creating a separate product for the fee and asking customers to add it to the cart depends on buyer behavior and staff reminders. Customers will forget, remove it, or question it. You then have to decide whether to chase them for the fee or absorb it.
  • Manually editing orders in the admin: Adding a fee line by hand for Colorado or Minnesota orders does not scale. It depends on staff noticing the destination and order value every time, and it introduces a bigger risk of inconsistent treatment between orders, shifts, and staff members.

Each of these approaches increases friction for customers, adds internal work, and makes it harder to show that you consistently collected and separately listed the fee in the way the state expects.

A practical way to handle retail delivery fees with Magical Product Fees

While it may not automatically meet every detail of each state’s law, the Magical Product Fees app can assist significantly with applying and managing retail delivery fees.

First, the limitations: it cannot decide, on its own, whether a specific delivery meets every nuance of Colorado or Minnesota law. It does not know which carrier actually delivered the package or whether a mix of items in the cart meets a state’s exact threshold and exemption rules.

What it can do is handle the part Shopify struggles with:

  • Add a flat or percentage fee either at the order level (Order Fee) or the product level (Product Fee), with each fee shown as a separate line item in the cart, at checkout, and on the order summary.
  • Scope fees to specific locations, such as orders shipping to Colorado or Minnesota.
  • Label fees clearly, so customers see something like “Colorado Retail Delivery Fee” or “Minnesota Road Improvement and Food Delivery Fee” as a separate line item instead of a generic or hidden surcharge.
  • Let you update amounts quickly when a state changes the rate, without editing your product catalog.

Because the app supports either product-based fees or order-based fees for a given rule (not both at the same time), and cannot target specific shipping methods, the most realistic pattern for retail delivery fees in most cases is to use order-level fees with location conditions, and rely on your tax/accounting setup and/or manual fee refunds to handle edge cases and exemptions.

Below we will walk through patterns for Colorado and Minnesota so you can see how this works in practice.

Example: How to Add a Colorado Retail Delivery Fee on Shopify

Colorado’s retail delivery fee is structurally the simplest to model in Shopify because it:

  • Applies on each retail delivery of taxable tangible personal property by motor vehicle to a Colorado address.
  • Is a flat per-delivery amount set by the Colorado Department of Revenue and updated annually.

You still need to confirm whether your products and transactions are in scope, but once that is true, the mechanics of adding a separate fee line are straightforward.

Step 1: Confirm that Colorado’s fee applies to you

Work with your tax advisor and review the latest Colorado Department of Revenue guidance to confirm:

  • You are making retail sales of taxable tangible personal property delivered by motor vehicle into Colorado.
  • You or a marketplace provider are responsible for the fee.
  • You know the current combined retail delivery fee amount per delivery and any effective dates.

Once you know you must collect the fee, decide whether you will pass it on to customers or absorb it. Many retailers choose to pass it through as a separate line item.

Step 2: Create a Colorado Retail Delivery Fee rule in Magical Product Fees

In Magical Product Fees:

  1. Create a new Fee rule.
  2. Name it something clear, like “Colorado Retail Delivery Fee”.
  3. Set the fee type to a fixed dollar amount per order equal to Colorado’s current total retail delivery fee.
  4. Use location conditions so this fee only applies to orders where the shipping address is in Colorado.

Because this is an order-level fee, it applies once per qualifying order, regardless of how many items are in the cart, which matches Colorado’s “per delivery” structure in most ecommerce scenarios.

Step 3: Display and test the fee

Finally:

  1. Make sure the fee is visible at checkout and on the order summary / receipt as its own line.
  2. Place test orders:
    • One shipped to a Colorado address that includes taxable physical goods to confirm the fee appears at the correct amount.
    • One to a non-Colorado address to confirm the fee does not appear.

Once everything looks right, keep the rule active. You can update the fee amount when Colorado publishes new rates each year, without touching your product prices.

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Example: How to Handle Minnesota’s Retail Delivery Fee on Shopify

Minnesota’s Retail Delivery Fee is more nuanced. Based on the Minnesota Department of Revenue’s notice and professional summaries, some of the key differences are that:

  • It applies when:
    • The sale includes at least 100 dollars of taxable tangible personal property or clothing (including shipping in the threshold, but not including the fee itself).
  • There are small business exemptions and categories of transactions that are not subject to the fee.

Those rules are richer than what Shopify or a simple fee app can automatically enforce. Some manual intervention will be required. 

The challenge is getting something in place on Shopify that is close enough to be useful without turning your checkout into a science project.

Here is a practical way to approximate it at an order level:

Step 1: Decide if or when you want the fee to apply

Work with your tax advisor to confirm if or when the fee should usually apply for your store. For example, you might decide that:

  • Any order shipping to Minnesota
  • With an order subtotal above a certain amount
  • And containing mostly taxable goods

should carry the Retail Delivery Fee.

You will use this logic to choose your order subtotal threshold and to decide whether an order-level fee is a reasonable approximation for your catalog.

Step 2: Create a Minnesota Road Improvement and Food Delivery Fee rule

If you decide an order-level fee may work for your catalog, in Magical Product Fees:

  1. Create a new Fee rule.
  2. Name it something like “Minnesota Road Improvement and Food Delivery Fee” to match Minnesota’s recommended wording.
  3. Set the fee type to a fixed 0.50 dollar amount per order, matching the current Minnesota fee.
  4. Use the subtotal condition to apply the fee only when the cart subtotal is greater than $100.
  5. Use location conditions so this fee only applies to orders where the shipping address is in Minnesota.

Disclaimer: Magical Product Fees does not determine taxability or guarantee compliance. It cannot apply fees based on shipping method or simultaneously restrict a fee to both specific products/collections and detailed dollar thresholds for the same rule. This setup does not automatically check whether the contents of each Minnesota order meet every detail of Minnesota’s law. You remain responsible for ensuring you only ultimately charge the fee on qualifying transactions.

Step 3: Test and create a process for edge cases

After you set up the fee:

  1. Place a test order shipping to Minnesota with a typical cart (for example, more than 100 dollars of taxable goods) and confirm:
    • The 0.50-dollar fee appears as “Minnesota Road Improvement and Food Delivery Fee”.
    • The fee is not subject to sales tax in your setup if you are passing it through as a separately stated statutory fee.
  2. Place a test order to a non-Minnesota address and confirm the fee does not appear.

Then, work with your accountant or tax advisor to decide how to handle edge cases, such as:

  • Minnesota orders under the 100-dollar threshold including shipping and not the fee itself.
  • Orders where every item is exempt from the fee.
  • Situations where you choose to absorb the fee rather than charge it to customers.

In some stores, the best pattern is to let the app add the fee automatically for most Minnesota deliveries and then periodically review and adjust any exceptions in your accounting system or state return. Or, you can manually refund the fee on edge case scenarios where a fee was applied to an order it shouldn’t have been. 

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What merchants are saying about Magical Product Fees

“Just want to say how happy I am with this app … There are other apps like this, however Magical apps is staying up to date with the constant changes and requirements in order to keep my store in compliance with the ever changing legalities of charging processing fees. I can’t recommend this app enough!”

OticeShop.com (United States)

“Seamless solution for state regulatory compliance. Outstanding tech support with installation and customization.”

DataVision (United States)

Supporting Answers

What are U.S. retail delivery fees?

U.S. retail delivery fees are per-order surcharges that some governments impose on retail sales when goods are delivered to customers, usually by motor vehicle. They’re designed to raise revenue (often for transportation or environmental programs) by adding a small, separate fee on top of the normal product price, tax, and shipping at checkout.

Colorado and Minnesota currently charge them, but other states have discussed similar per-delivery fees. So, it is reasonable to expect this pattern might spread over time.

Colorado’s retail delivery fee

Colorado was the first state to create a statewide retail delivery fee. In broad terms, the fee applies when: 

  • A retailer sells taxable tangible personal property for delivery by motor vehicle to a location in Colorado.
  • The fee is due per retail delivery, not per item, and is made up of several individual components (for example, “Community Access Retail Delivery Fee,” “Clean Fleet Retail Delivery Fee,” and others).
  • The total per-delivery fee amount is set by the Colorado Department of Revenue and is updated annually.
  • The fee is reported and remitted by the retailer (or marketplace provider, if applicable), and is not subject to Colorado state or state-administered local sales tax when treated as a separately stated fee, though local home-rule jurisdictions may have different treatment.

Colorado allows retailers to pass the fee on to customers as a separate line item, which is why many ecommerce stores want a clear “Colorado Retail Delivery Fee” row on the order and receipt instead of quietly baking the cost into product prices or shipping.

Minnesota’s retail delivery fee

Minnesota’s Retail Delivery Fee (RDF) took effect July 1, 2024. According to state guidance summarized by tax professionals:

  • The fee is set at 0.50 dollars per taxable sale.
  • It applies to retailers of taxable tangible personal property or clothing when the transaction:
    • Is delivered to a location within Minnesota by motor vehicle (including third-party delivery services).
    • Includes at least 100 dollars of taxable tangible personal property or clothing (the 100-dollar threshold includes shipping charges but excludes the RDF itself).
  • There are important exemptions, including small businesses under specified Minnesota-sales thresholds, certain wholesale and exempt-purchaser sales, and transactions where all items are exempt (for example, some groceries, drugs, specified baby products, and utilities).
  • When retailers pass the fee on to customers, Minnesota says it must appear as a separate line item labeled “Road Improvement and Food Delivery Fee”, and this fee is not subject to sales tax if separately stated.

Are retail delivery fees subject to sales tax?

In both Colorado and Minnesota, guidance indicates the retail delivery fee itself is not subject to state sales tax when it is separately stated as its own line item on the invoice or receipt.

However, normal shipping charges may still be part of the sales price for sales tax and threshold purposes in some states. Always confirm how your tax engine is treating the fee and shipping lines so you do not accidentally tax the fee or miss it in threshold calculations.

Can I just build the fee into shipping instead of adding a separate line?

Technically you could increase shipping rates for Colorado or Minnesota, but this has several downsides:

  • Customers cannot see that part of the charge is a state-mandated fee, which can reduce trust if they later learn about it.
  • It is harder for you to reconcile how much fee you collected versus how much you owe the state.
  • Guidance in Minnesota specifically expects the fee to be shown as its own line labeled “Road Improvement and Food Delivery Fee” if you pass it on to customers.

Using a separate line item via Magical Product Fees makes it easier to explain the charge and to reconcile your books.

Do marketplaces or carriers handle these fees for me?

Some marketplaces and platforms may handle retail delivery fees on sales they process as the “marketplace provider,” but that does not automatically cover:

  • Sales on your own Shopify store.
  • Direct sales where you, not the marketplace, are the retailer of record.

Colorado and Minnesota generally treat the retailer or marketplace provider as responsible for the fee, which means you should not assume your carrier (for example, UPS, FedEx) or a third-party app has taken on that responsibility for you. Check your contracts and state guidance if you sell through multiple channels.

Does Magical Product Fees fully automate my compliance with these fees?

No. Magical Product Fees helps with the mechanical side of:

  • Showing a clearly labeled per-order fee line.
  • Targeting that fee to specific states.
  • Updating the fee amount without changing product prices.

You still need to:

  • Confirm whether each state’s fee actually applies to your business.
  • Understand thresholds, exemptions, and reporting requirements.
  • Decide how to handle edge cases (for example, low-value Minnesota orders or fully exempt transactions).

Think of the app as the piece that makes Shopify capable of showing these fees transparently. The legal interpretation of when to charge the fee and if the mechanical capabilities of the app fulfill the requirements legally remains a decision between you and your tax advisor.

Handling refunds and exceptions

When you use Magical Product Fees, each fee is added to the order as its own line item. Behind the scenes, the app treats the fee as a product, which means you can:

  • Refund just the fee if you later decide the Retail Delivery Fee should not have applied on a specific order. This allows you to remove the fee while leaving the rest of the order intact.
  • Keep a clear audit trail in Shopify that shows when the fee was charged and when it was refunded.

This is helpful if you occasionally discover that an order did not actually meet the criteria for the fee or if you choose to absorb it as a goodwill gesture. You can fix the order in Shopify, then make sure your accounting records and state return reflect the corrected fee amount.

Key Takeaway

Retail delivery fees in Colorado, Minnesota, and any future states are small on a per-order basis but meaningful over hundreds of shipments, and they come with specific rules about when they apply and how they must appear on customer receipts. Shopify does not have native support to add retail delivery fees as separate state-specific fee lines, which leaves merchants either over-simplifying or doing manual work.

In our work helping Shopify stores add regulatory fees like bottle deposits, eco fees, and excise taxes, the pattern has been consistent: merchants either try to hide the fee in pricing or shipping and fight confusion later, or they do a lot of manual work in the admin. 

Magical Product Fees gives you a practical middle path for automating most aspects of retail delivery fees too. You can configure per-order “Colorado Retail Delivery Fee” and “Minnesota Road Improvement and Food Delivery Fee” rules for orders shipping into those states, keep the charges transparent at checkout, and update amounts as states change their rates, while still relying on your tax advisor and internal processes to decide exactly when the fee should apply.

If you decide to implement these fees in your Shopify store and want help setting them up in Magical Product Fees, your next best step is to clarify your state obligations with your tax advisor, then reach out to us. We would be happy to see if we can get the app working for your specific retail delivery fee use case.

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Further Reading

If you want to go deeper into the official rules, these resources are a good starting point:

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