Many consumers in the U.S. are feeling the strain of higher costs on groceries, dining and everyday goods — and now some state and local governments are introducing an additional charge on top of existing delivery fees. As more households turn to on-demand services for convenience or necessity, lawmakers are exploring a new category of fees applied to orders delivered directly to a customer’s door.
These charges — commonly referred to as “doorstep taxes” but formally known as retail delivery fees — apply to taxable goods that are ordered online and delivered by motor vehicle to a home address. This includes deliveries made through services such as Amazon, Walmart, Instacart, DoorDash, Uber Eats and other retail or grocery delivery apps when the items being delivered are taxable. They are separate from platform fees such as service or delivery charges and are collected by retailers or marketplaces on behalf of state governments. The fees are added per order and are charged in addition to state sales tax.
Supporters of these policies say they are intended to generate revenue for infrastructure and transportation budgets as delivery volumes increase and fuel-tax revenue declines. Opponents argue that the fees add complexity for businesses and increase overall purchase costs for customers who rely on delivery services. While only two states currently have retail delivery fees in place, several others are considering similar proposals. Here’s where these taxes are being implemented, how companies are responding and what they could mean for consumers who shop online.
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Which states are including this tax?
Colorado introduced the first statewide retail delivery fee in 2022, followed by Minnesota in 2024. In Colorado, the fee applies to deliveries of taxable goods made by motor vehicle and does not apply to local retailers with less than $500,000 in annual sales or to out-of-state retailers with less than $100,000 in sales to Colorado customers. (1) Minnesota charges a flat 50-cent fee on deliveries of $100 or more that include taxable goods or clothing. (2)
Several other states — including Maryland, Rhode Island, Washington and Oregon, and several others, including New York and Indiana have left the possibility up to local governments. (3, 4, 5, 6, 7) In Maryland, the proposal was met with industry opposition that confirms lawmakers were considering it in the BRFA debate. (8) Rhode Island’s H-6365 would add a 50-cent fee per delivery and spells out that the charge must appear as a separate line item on every order. (9)
Lawmakers cite eroding gas-tax revenues as a key factor, pointing to the rise of electric and hybrid vehicles used in delivery fleets. (10) Because these retail delivery fees are charged per order rather than as a percentage of sales, supporters say they offer a more stable and activity-based funding source for road maintenance and infrastructure. Washington’s municipal association and legislative analysts frame the retail delivery fee as a way to align funding with rising e-commerce volume and road wear. (11)
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How big tech companies are responding
Retailers, delivery platforms and business coalitions have raised concerns that doorstep taxes add administrative complexity and may increase operating costs for both large and small businesses.
Critics point out that complying with the new law will be difficult because the charge is per item and not calculated like sales tax on a percentage of the sale price. (12) For example, a wedding florist in Farmington, New Mexico who makes regular deliveries to Durango, Colorado will be able to avoid the delivery fee if their sales are less than $100,000, but every delivery thereafter will be subject to it, so the business will not only have to track their sales to Colorado, but also the units sold.
A coalition letter organized by the Chamber of Progress, a business advocacy group in Maryland, urged Maryland lawmakers to drop the proposal, saying that in Colorado, the delivery tax has caused an annual loss of $17.1 million in wages for local workers, including restaurant employees, and puts over 61,000 jobs across various industries. (13)
While these figures reflect industry concerns, the underlying policy debate is clear: either delivery costs increase to account for infrastructure use, or state and local governments must identify alternative funding sources to maintain roads as delivery volumes rise.
Should doorstep taxes impact whether you choose to shop online?
The cost of on-demand delivery can already include multiple layers of charges, including platform service fees, fuel surcharges, local minimum pay adjustments, tips and sales tax. Retail delivery fees add another line item to that total, but they apply only in states that have enacted the tax — and only when you order taxable goods delivered by motor vehicle. In most cases, this includes retail items, groceries with taxable components and restaurant orders, but not untaxed essentials such as prescription medicine or most food staples.
In states like Colorado and Minnesota, where these fees are already in effect, consumers may notice small additional charges per order — generally between 25 and 75 cents. For example, if you use Amazon for household goods or place a grocery order through Instacart in these states, the fee would apply. However, if you order in a state without a retail delivery fee, or you’re purchasing non-taxable food items, the tax may not apply.
Consumers who want to monitor their spending can track line-item charges on their receipts or review account histories within delivery apps to see how taxes and fees contribute to overall costs. Understanding how these fees are calculated may help individuals make more informed decisions about when delivery offers value — and when alternatives such as in-store shopping may be more cost-effective.
Fees and taxes reflect, at least in part, the real cost of convenience. The solution may be to eat more meals at your restaurant of choice or to make more trips to your local store. What’s more, planning your purchases ahead of time may also be good for your budget as it forces us to be thoughtful about our spending, instead of scrolling through cheap items that are as easy to buy as a tap of the finger.
Doorstep taxes remain limited in scope today, but they signal a broader shift in how states are approaching the growth of the delivery economy. As legislation evolves, shoppers may need to weigh whether the ease of doorstep delivery continues to justify the additional fees, or whether alternative purchasing methods offer better value for their budgets.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Colorado Department of Revenue (1); Minnesota Department of Revenue (2); Maryland General Assembly (3); Rhode Island General Assembly (4), (9) ; Washington General Assembly (5); Oregon Department of Transportation (6); Sales Tax Institute (7), (12); Maryland Chamber of Progress (8); The Tax Adviser (10); Washington State Joint Transportation Committee (11); Progress Chamber (13)
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