California Requires Retailers to Collect a New Recycling Fee on Embedded Batteries By Sam Celly, MS, JD, CSP, President and CEO, Celly Services Inc. Effective Jan. 1, 2026, retailers doing business in California — including automotive dealerships — must comply with the newly established Covered Battery-Embedded Products (CBE) Waste Recycling Fee, administered under Senate Bill (SB) 1215. Retailers must register with the California Department of Tax and Fee Administration (CDTFA) and collect the CBE fee at the point of sale or lease of applicable products. The program is jointly overseen by CDTFA, CalRecycle and the Department of Toxic Substances Control (DTSC). It is intended to support statewide recycling of electronic products containing non-removable batteries. The new law expands the existing Electronic Waste Recycling Act of 2003 to include these “covered battery-embedded products.” WHAT IS A COVERED BATTERY-EMBEDDED PRODUCT? Covered battery-embedded product means “a product containing a battery or battery pack that is not designed to be removed from the product by the consumer” (California Public Resources Code § 42464(d)(1), as amended by SB 1215, 2022). What You Need to Know • CDTFA has confirmed that retailers should reach out to their manufacturers to check which of the products they carry are subject to the CBE fee. • Manufacturers must make this determination, share it with their retailers and provide an annual list to CDTFA. • Fixed ops should determine which products you sell or lease that contain an embedded battery. • Tax folks should determine the fee that is to be collected from customers. • Accountants should create an account where the fee is to be routed. • DMS should be set up to create language for the line item on invoices. • Parts and service staff should be trained to explain the fee to customers. • The business office must pay the CBE fee to the state on a quarterly basis. • The CBE recycling fee generally does not apply to items replaced under a factory (mandatory) warranty. However, it applies to items replaced under an optional (extended) warranty. • Dispose of CBE like your other e-waste. Set up for recycling and keep out of regular trash. For more information, scan the QR code to view CDTFA’s Covered Electronic Waste Recycling Fees Guide. https://cdtfa.ca.gov/taxes-and-fees/covered-electronic-waste-recycling-fee/ EXAMPLES OF CBE AT DEALERSHIPS • Consumer electronics • EV-related accessories • Diagnostic or programming devices • Electronic tools or service accessories • Tire Pressure Monitoring Systems (TPMS) • Smartphones, tablets and similar sealed battery devices Note: Key fobs are not considered CBE because they contain batteries that are designed to be easily removed by the user with common household tools. More About TPMS Sensors Many TPMS sensors contain sealed lithium batteries that are not easily user-replaceable. This design places TPMS within the scope of a CBE. As of early March, while no TPMS manufacturer has released official SB 1215 guidance, CalRecycle has provided guidance to manufacturers to help identify which products are classified as CBE on its website, accessible by scanning the QR code. https://calrecycle.ca.gov/electronics/embeddedbatteries/noticeguide/ Dealerships should prepare for potential inclusion and closely monitor manufacturer updates. 18 SAN DIEGO DEALER
RkJQdWJsaXNoZXIy MTg3NDExNQ==