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CLARIFICATION FOR FEE ON PRODUCTS CONTAINING NON-REMOVABLE (EMBEDDED) BATTERIES

 NEWSLETTERTO:                 ClientsFROM:           Sam Celly, BChE MChE JD CSPDATE:             April 20, 2026SUBJECT:       CLARIFICATION FOR FEE ON PRODUCTS CONTAINING NON-REMOVABLE (EMBEDDED) BATTERIESIntroduction & Purpose
Effective January 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) irrespective of the fact whether any fees are due or not. 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.) Essentially, products that contain hard to replace batteries.The CDTFA has confirmed with CNCDA that“dealers selling ‘covered battery-embedded products’ (CBEP) retail over the parts countermust register with the CDTFA and remit the fee for qualifying products.”What you need to doDealers should audit parts inventory and check with manufacturer if CBE fee is applicableTax persons should determine the Fee to be collectedAccountants should create an account where the fee is to be routedDMS should be set up to create language for the line item on the invoiceTrain parts staff to explain the fee to customersBusiness Office to pay the CBE Fee to the state on a quarterly basis.The CDTFA has confirmed with CNCDA that the fee is applicable to CBE products sold over the parts counter.  Dealership vehicle sales and service operations are exempt.Dispose CBE just like your other e-waste.  Set up for recycling and keep out of regular trash.For more info: https://cdtfa.ca.gov/taxes-and-fees/covered-electronic-waste-recycling-feeCBE Fee Rates
CalRecycle has finalized the 2026 fee structure.  This will be revised annually in October and will take effect January 1 of the following year.1.5% of the retail sales priceCapped at $15 per productEffective January 1, 2026Dealership POS systems will need to incorporate the percentage-based calculation and the per-item cap. They may retain three percent of the CBE waste recycling fee collected as reimbursement for all fee collection costs.Filing Requirements & Due Dates
Returns and payments are due the last day of the month following each calendar quarter. For example, the first required reporting period is for the first quarter, January 1 through March 31. The return and fee payment are due on or before April 30th. The return is due on either a quarterly or yearly filing basis, and filing frequency is assigned when you register. You are required to file a return even if you did not have any reportable activity or do not owe an amount during the reporting period.Dealership ResponsibilitiesRegister with CDTFA for the CBE FeeFee collection at parts point of saleFiling CBE returns, at assigned frequencyTimely remittance of fees to CDTFARetain 3% of fees as reimbursement for all fee collection costsInventory review and system updateConnect with auto manufacturer representative to confirm fee applicabilityNon-compliance may result in CDTFA penalties, interest, and enforcement action.The following transactions are not subject to the CBE waste recycling fee.A sale for resaleA sale to Native Americans on Indian countrySale of CBE products the retailer ships directly to a location outside California when the transaction is not subject to California sales or use tax. The fee will apply if the buyer takes possession of the CBE products in CaliforniaExamples of CBE in Automotive PartsPortable jump starters and battery boostersPortable power banksTPMS (tire pressure monitoring) sensorsAutomotive GPS/navigation unitsOBD-II connected-car devices with cellular/Wi-FiDash camerasAutomotive diagnostic tools — digital multimeters, electronic torque wrenches, dial indicatorsTrack-day / performance driving devicesWireless towing and trailer light kitsBody shop inventory management hardwareNote:  Key fobs are not considered CBE because it contains a battery that is designed to be easily removed by the user with common household tools. DISCLAIMER: The contents of this newsletter are merely for informational purposes only and are not to be considered as legal advice.   Employers must consult their lawyer for legal matters and EPA/OSHA consultants for matters related to Environmental, Health & Safety. The article was authored by Sam Celly of Celly Services, Inc. who has been helping automobile dealers comply with EPA and OSHA regulations since 1987.  Sam received his BE (1984) and MS (1986) in Chemical Engineering, followed by a J.D. from Southwestern University School of Law (1997).  Our newsletters can be accessed at www.epaoshablog.com.  Your comments/questions are always welcome.  Please send them to sam@cellyservices.com. 

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