In 2021, the Colorado General Assembly enacted House Bill 21-1162, Management of Plastic Products. This new state law requires that grocery, retail, and convenience stores collect a $0.10 fee on each single-use plastic or recyclable paper carryout bag provided to their customers. Douglas County did not initiate this fee.
Beginning January 1, 2024, the act prohibits stores and retail food establishments from providing single-use plastic carryout bags to customers. Certain retail food establishments, and small stores that operate solely in Colorado and have 3 or fewer locations, may provide single-use plastic carryout bags.
The act does not apply to materials used in the packaging of pharmaceutical drugs, medical devices, or dietary supplements or any equipment or materials used to manufacture pharmaceutical drugs, medical devices, or dietary supplements.
Background
Between January 1, 2023, and January 1, 2024, a store may furnish a recycled paper carryout bag or a single-use plastic carryout bag to a customer at the point of sale if the customer pays a fee of 10 cents per bag or a higher fee adopted by the municipality or county in which the store is located. On and after January 1, 2024, a store may furnish only a recycled paper carryout bag to a customer at the point of sale at a fee of 10 cents per bag or a higher fee imposed by the municipality or county in which the store is located.
A store is required to remit, on a quarterly basis beginning April 1, 2024, 60% of the carryout bag fee revenues to the municipality or county within which the store is located and may retain the remaining 40% of the carryout bag fee revenues. The carryout bag fee does not apply to a customer that provides evidence to the store that the customer is a participant in a federal or state food assistance program.
Remittance Process:
Unless you apply for and receive an exemption to this requirement (see more about this below), you must remit sixty percent (60%) of the collected fee to Douglas County every quarter. Your business retains the remaining forty percent (40%).
Retailers must remit carryout bag fees collected, on a quarterly basis, using this form. This form must be submitted, even if the retailer did not collect more than $20 in carryout bag fees and will not be submitting any money. Returns are due on the 20th day of the month, following the reporting quarter. The return is due the next business day if the 20th is on a Saturday, Sunday, or legal holiday.
Exemption Status
As mentioned above, this state law does have an exemption to the fee collection and remittance requirement for eligible small stores. You qualify for the exemption if you operate solely in Colorado, have three or fewer locations, and are not part of a franchise, corporation, or partnership that has a physical location outside of Colorado.
If you believe your business qualifies as a small business for the exemption, please apply for the exemption form below, and return it to the Douglas County Sales Tax Division at the address below. Douglas County will review the application and notify you of the decision.
Stores are exempt from collecting the Carryout Bag Fee if they meet the following criteria:
Stores that meet the exemption criteria may complete the Exemption Application Form here.
In 2021, the Colorado General Assembly enacted House Bill 21-1162, requiring stores to collect a ten-cent ($0.10) fee for providing a recycled paper carryout bag or a single-use plastic carryout bag to a customer. Stores located in Unincorporated Douglas County must collect and remit the fee on a quarterly basis to Douglas County.
Douglas County did not initiate this fee.
The fee is ten cents ($0.10) on every carryout bag provided. Of the ten cents ($0.10) fee, 60% of the fee is remitted to Douglas County, and the store retains the remaining 40%.
Retail stores must collect and remit the carryout bag fee. A store means a grocery store, supermarket, convenience store, liquor store, dry cleaner, pharmacy, drug store, clothing store, or other types of retail establishment at which carryout bags are traditionally provided to customers.
Certain small stores that operate solely in Colorado, have three or fewer locations, and are not a part of a franchise, corporation, or partnership that has a physical location outside of Colorado, do not have to collect the carryout bag fee.
A bag fee does not apply to some bags, such as those used to package bulk items, produce, meat, fish, medications, or laundry/dry-cleaning/garment bags.
A store must collect the carryout bag fee starting January 1, 2023.
Shoppers can avoid the bag fee by bringing and using their own reusable bags.
The carryout bags fee does not apply to a customer that provides evidence to the store that the customer is a participant in a local, state, or federal food assistance program.
Everyone else, including tax-exempt organizations, such as governments or other 401(c)(3) organizations, must pay the fee if the store provides them with a carryout bag.
Beginning January 1, 2024, the act prohibits stores and retail food establishments from providing single-use plastic carryout bags to customers. However, the prohibition does not apply to inventory purchased before January 1, 2024, and used on or before June 1, 2024.
Stores must show the total amount of fees charged for the carryout bags provided on the receipt and display a sign inside or outside the store alerting customers about the carryout bag fee.
No, HB21-1162 does not dictate how the store spends its portion of the carryout bag fees.
While HB21-1162 states the first return is due starting April 2024, fees collected in 2023 are still due to the County. Therefore, we suggest remitting the carryout bag fees beginning in April 2023.
Stores must remit a return every quarter. Returns are due on the 20th day of the month following the close of the quarterly filing period. The return is due the next business day if the 20th is a Saturday, Sunday, or legal holiday.
HB21-1162 states that a store does not have to remit the carryout bag fees collected in any quarter in which the collected fees total less than twenty dollars. However, the store is still required to mail a return stating that less than twenty dollars was collected and has to remit the fees on the next quarterly remittance.
