On Tuesday, Chamber of Progress released new research exploring the economic cost of delivery tax proposals that add a fee to online orders. The research, which finds that delivery taxes create a significant financial burden for low-income families, uses data from Colorado, where a delivery tax has been passed and implemented. The study estimates that Colorado’s delivery tax has cost the state tens of millions of dollars and hundreds of jobs.

Read the full report: The Negative Economic Impacts of Retail Delivery Fees

“Taxing deliveries has real repercussions for local businesses and workers,” said Chamber of Progress Director of Civic Innovation Policy Ruth Whittaker. “This is a regressive tax that wealthy individuals might not notice, but it adds another item to the budget for low-income and working families. As consumers struggle with high prices, nobody wants to add another tax on a takeout meal or an order of paper towels.”

Top findings from the research on delivery taxes’ economic costs include:

• The financial cost of Colorado’s delivery tax is 6.5 times higher for households with annual incomes under $25,000 compared to those making over $200,000.
• Colorado’s delivery fee added a significant tax burden on essential household products and takeout: 1.2% on paper towels, 1.3% on trash bags, and 3.5% on a turkey sandwich.
• In effect, Colorado raised the sales tax for essential household products and takeout food by as much as 120%.
• Colorado’s retail delivery fees added to the cost of delivered takeout food which in turn reduced the number of restaurant takeout orders by 407,456.
• Just considering the impact of reduced orders for freshly prepared meals, the delivery tax cost the state economy $26.9 million in annual sales, 367 jobs, and $17.1 million in wages.

A separate Chamber of Progress report on delivery in the US released last July shows that online delivery orders can actually reduce roadway usage and associated infrastructure costs as well as carbon emissions by cutting down on individual trips to the store and grouping delivery fulfillment.

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Chamber of Progress (progresschamber.org) is a center-left tech industry policy coalition promoting technology’s progressive future.  We work to ensure that all Americans benefit from technological leaps, and that the tech industry operates responsibly and fairly.  

Our corporate partners do not have a vote on or veto over our positions. We do not speak for individual partner companies and remain true to our stated principles even when our partners disagree.