New State Delivery Fees Show Importance of Wineries Getting Accounting in Order

In 2022, Colorado became the first state to impose a retail delivery fee for goods delivered by motor vehicle. Minnesota’s retail delivery fee will take effect this year, and Minnesota wineries will experience the same accounting complications that Colorado wineries did a couple of years ago.  

Regardless of what state your winery is in, you should pay attention to the new fees in Colorado and Minnesota. Minnesota’s fee is expected to raise $60 million per year in revenue. If it comes close, other states looking for ways to fund road maintenance and other public infrastructure projects are sure to follow. And if your winery delivers over the road to Colorado, Minnesota, or any other state that adopts a similar fee, you’ll be responsible for staying compliant. 

How the Fees in Colorado and Minnesota Work 

The rules and actual fees in Colorado and Minnesota differ, but they work essentially the same way. 

In Colorado, the fee is 28 cents for any retail delivery that: 

• Contains at least one item subject to state sales or use tax. 

• Is made by motor vehicle to a location in Colorado. 

Last year, the state amended its fee to exempt businesses with prior-year retail sales under half a million dollars. It also now allows companies to pay the fee themselves rather than making them charge their customers separately. 

In Minnesota, the fee will be 50 cents per delivery of at least $100 in products subject to state and local sales taxes. As with the amended Colorado fee, retailers don’t have to collect it from customers. Retailers who made less than $1 million in sales in the previous year are exempt, as are deliveries of certain types of products, including food, prescription drugs, medical devices, and baby products. Wine deliveries are not exempt in either state. 

Why Wineries Should Pay Attention 

The fees in Colorado and Minnesota won’t significantly affect the average winery’s budget. But as with any other government-imposed fee, failure to pay and report can lead to financial penalties, with interest.  

Yet, the pain is less financial and more logistical: It’s another line in your winery’s sales and use tax return, which means another layer of complexity in the accounting process. 

If your winery is still doing its accounting manually or with a non-wine-specific software solution, that pain will be much more pronounced. Without efficient accounting processes, it’ll be far too easy for a retail delivery fee to slip through the cracks, especially if the state that imposes it is one of many to which your winery delivers.  

Whether you’re already affected by the fees in Colorado and Minnesota or anticipating a similar fee in your state, it’s a good time to investigate wine-specific ERP options like VinPoint.  

Our team knows wine just as well as it knows ERP software, and we can help you stay on top of anything that comes down the pike in this rapidly changing industry. To learn more, reach out today.