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Thu Apr 20 2023 22:02:18

Costs Could Hit Sellers as More States Mull Delivery Fees

By: Ina Steiner

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Fees and taxes are contagious, as evidenced by the spread of online sales tax requirements instituted by a majority of states since the landmark Supreme Court Wayfair ruling. The latest trend is for states and cities to explore charging buyers delivery fees, such as the one Colorado passed last year.

Some lawmakers in Minnesota (H.F. 580) and New York (A03009) are currently proposing delivery fees of 75 cents and 25 cents, respectively.

The Minnesota House passed a transportation bill Wednesday containing a provision for the 75-cent delivery fee for orders "delivered via motor vehicle" that require retailers and restaurants to collect and remit the fee to the state commissioner of revenue. The state Senate version doesn't include the delivery fee, according to Yahoo News.

Minnesota ABC affiliate KSTP's coverage included an interview with a local restaurant chain, which told the news station they would incur costs even though the customer would pay the 25-cent delivery fee: "There will be costs incurred by us as retailers to implement this both at point of sale and accounting systems as well as administrative costs to accurately account for and remit these fees."

Avalara explained that not only is New York State mulling a delivery fee, so is New York City. "Should both AB 3009 and SB S5895 be enacted, residents of The Big Apple will have to pay 50 cents on online deliveries into the city and 25 cents on other deliveries of tangible goods," it wrote. Some readers might recall that in 2020, New York City wanted to charge a whopping $3 delivery fee.

Meanwhile, Colorado, which charges a 27-cent delivery fee, is considering exempting small businesses from having to impose the fee, according to KSTP's reporting. And Avalara wrote, "Collecting, remitting, and reporting the Colorado retail delivery fee is anything but negligible for affected businesses."

As we wrote last year, even though marketplaces collect and remit Colorado's delivery fee, there's still a cost to sellers who must pay payment-processing fees on the total amount of transactions. "The new fee collected from Colorado buyers is 27 cents - so on eBay, for example, sellers who pay a 12.9% Final Value fee would pay an extra $3.48 for every 100 transactions or $34 for every 1,000 transactions to Colorado. That's one state - what happens when others hop on the fee bandwagon?" Note that the Final Value fee for most categories on eBay rose from 12.9% to 13.25% on February 15, 2023.



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Perminate Link for Costs Could Hit Sellers as More States Mull Delivery Fees   Costs Could Hit Sellers as More States Mull Delivery Fees

by: UB This user has validated their user name.

Fri Apr 21 04:52:45 2023

More taxes and more taxes.. These politicians cant get enough. All they want to do is spend and get their friends rich with kickbacks.  History will repeat itself.

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This user has validated their user name. by: Rexford

Fri Apr 21 15:35:59 2023

"That's one state - what happens when others hop on the fee bandwagon?"

Believe me, they will.  Monkey see monkey do. And there are a lot of monkeys in state and city governments.

So the tax itself was not enough for them.  GREED!!!!!    I probably wouldn't mind if I felt like the poor and middle class got something for it, such as healthcare.

Companies and states are nickel and diming citizens to death.  Oh, add eBay and Etsy to the nickel and dimers list as well.

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This user has validated their user name. by: The End

Fri Apr 21 16:15:57 2023

Congress would strike this down as predatory.

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by: Fruitylovesyou This user has validated their user name.

Sat Apr 22 15:29:12 2023

That's to their states. There will always be a small biz exemption... I mean how many sellers ship that many to a particular state to require tax collection in a tax year. Its all intentionally blurred.  Every venue needs sellers and they will fight the fight for you if they think sellers will cut back on using their marketplace.  It has nothing to do that they care about you..its that your wallet represents how they get their revenue. Less revenue = angry shareholders. That's how you win

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This user has validated their user name. by: DeathFromAbove

Mon Apr 24 01:39:07 2023

With the forced sales tax on USED items already imposed...they have more revenue than ever in history.  They get money whenever something is sold once, twice, three times over.  Will it ever be enough?

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by: Chicago48 This user has validated their user name.

Mon Apr 24 02:12:52 2023

The delivery fee would apply to groceries being bought and delivered; or Grubhub Eats; or Uber eats.  It wouldn't apply to online sellers unless you have local delivery to the buyer.  That's why Craigslist is a gem.  No taxes no taxes no taxes.  I just sold 4 storage bins peer to peer through Craigslist and trying to sell a TV.
The consumer is getting slayed by all these taxes and surcharges.  Our city has a tax on streaming.  If I "buy" a movie online it's taxed.  YES!  Entertainment taxes in Chicago.  And we have a new mayor, who I predict will find some way to increase taxes or find new ones.

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by: LJW This user has validated their user name.

Mon Apr 24 08:27:05 2023

That's cool. I'll just block those locations from my store. The companies delivering the goods are already paying highway use tax. This clearly double taxation. They can't tax a specific use apart from other uses. Why not a soccer mom tax? If you are specifically on your way to soccer practice you have to pay a quarter!

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by: railady This user has validated their user name.

Mon Apr 24 08:48:46 2023

At least in New York, this fee is going to be charged on ANY delivery of "personal tangible property."  There are exceptions listed, but not terribly many. (

In NEW YORK - This fee would apply to just about ANY transaction, note the bill language specifically says "online or not" :

(b)  "Delivery  transaction"  means  a transaction that results in the delivery  of  personal  tangible  property  from  retail  sale,  whether purchased online or not, to the purchaser within the state."  NY does not care if you get it by Pony Express, or whether you ordered by homing pigeon.  The fee applies.

Here is the bill (buried deep in one of the "budget bills" that they are counting on nobody understanding -

https://nyassembly.gov/leg/?default_fld=&leg_video=&bn=A03009&
term=&Summary=Y&Text=Y

Scroll down to Section JJ, which proposed a new Article 29-D, it's about in the middle.    

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This user has validated their user name. by: Bidonmine

Mon Apr 24 08:50:03 2023

Can the add fees to usps deliveries? That would be taxing federal government delivery services.

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by: Stone Cutter This user has validated their user name.

Mon Apr 24 09:21:37 2023

*** And this is another example....***

I’ve said now for years....
There is no money selling cheaply priced items. It’s much easier to absorb fee increases when having larger profit margins.

It’s all about the math.  

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by: CBW This user has validated their user name.

Mon Apr 24 09:41:45 2023

It appears that all of the states doing this are blue states.  

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by: spooky This user has validated their user name.

Mon Apr 24 10:12:38 2023

VOTE LIBERTARIAN  

Perminate Link for Costs Could Hit Sellers as More States Mull Delivery Fees   Costs Could Hit Sellers as More States Mull Delivery Fees

by: Disgruntled_Seller This user has validated their user name.

Mon Apr 24 10:20:39 2023

Tax and Spend, Spend and Tax. What ever happened to downsize and curtail spending to make ends meet? Lets tax more so we can increase size and spend more so we can require more taxes to continue the process. Job and agency/authority security! No end to it and regardless of intent of where to initially apply this tax or fee there WILL BE creep into other areas as these folks cannot keep their gubby hands out of other's pockets.  

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by: NYSteve This user has validated their user name.

Mon Apr 24 11:09:42 2023

WOW! it almost pays to get back in your car and do shopping errands all day at brick and mortar

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by: Chicago48 This user has validated their user name.

Mon Apr 24 11:19:54 2023

Can the add fees to usps deliveries? That would be taxing federal government delivery services.
^^
This seems to be illegal.  If there is a delivery tax on shipping & postage, then that's taxing on postage which is government.  You make a good point.  I don't know how the states can do that.  And I thought "delivery" meant Grubeats and Ubereats, not Postage.

Perminate Link for Costs Could Hit Sellers as More States Mull Delivery Fees   Costs Could Hit Sellers as More States Mull Delivery Fees

by: Chicago48 This user has validated their user name.

Mon Apr 24 11:21:34 2023

I think some of you are misreading the law:  75-cent delivery fee for orders "delivered via motor vehicle" that require retailers and restaurants to collect and remit the fee to the state commissioner of revenue.
^^
Delivered via motor vehicles (does that mean bicycle too) to me means grocery and food delivery, perhaps furniture.
This is going to cause people to order online and go to the store to pickup.  It still stinks.

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This user has validated their user name. by: Working It

Mon Apr 24 14:29:29 2023

Lots of stores (other than grocery, restaurant and furniture) offer local delivery services that aren't delivered by USPS, UPS or FedEx.

I don't shop there, but I've seen what appear to be Wal-Mart delivery vans. Appliance stores deliver. Flooring companies deliver to their DIY customers, or for flooring installation companies. Landscape companies deliver gravel, topsoil, shrubs and trees (and those folks already pay pretty heavy use tax for those vehicles!)  

Seems like a pretty big grab.

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by: railady This user has validated their user name.

Mon Apr 24 19:28:12 2023

My take is that this charge is a "FEE" not a "TAX." Indeed, there is sales tax on postage (and insurance in some states) but the "Fee" is for delivering the package to you -- not on the postage.  

"FOOD" delivery is exempt.  Exemptions are determined by what is delivered. Not the company doing the delivering.  

GREED it is. Government needs to flush out all the money it possibly can to pay for all of those expenses, many of them frills, the "bacon" that "our" representatives "bring home" to their districts, so they can keep the folks blindsided with "Free" gifts from government.  It astounds me how "people" just can't seem to understand what is actually going on.    

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This user has validated their user name. by: Bill

Mon Apr 24 22:57:08 2023

The Libertarian view is taxation is theft.

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This user has validated their user name. by: The End

Tue Apr 25 11:15:08 2023

Well, it is.

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