What Retailers Need to Know
Effective January 1, 2026, California implemented a new Covered Battery Embedded (CBE) Waste Recycling Fee that applies to retailers selling or leasing certain electronic products. If your business offers products containing embedded batteries, this requirement may impact your sales, leasing and internal use practices in the state.
This new fee is part of California’s broader effort to strengthen electronic waste management and support proper recycling of high-risk, battery-embedded products.
Who Must Register?
Businesses must register for the CBE Waste Recycling Fee if they are:
- Retailers selling or leasing CBE products for use in California
- Purchasers/consumers acquiring CBE products for personal or business use without paying the fee at checkout (including retailers withdrawing inventory for their own use)
- Vendors collecting the fee on behalf of a retailer
Fee Collection Requirements
Beginning January 1, 2026, registered retailers must:
- Collect the CBE waste recycling fee at the point of sale or lease
- Apply a rate of 1.5% of the retail sales price per CBE product
- Ensure the fee does not exceed $15 per item
- Monitor annual rate adjustments — CalRecycle publishes updated rates by October 1 for the following calendar year
What Qualifies as a CBE Product?
A CBE product is any device containing a battery that cannot be removed by the user without specialized tools. Examples include:
- Smartphones
- Smartwatches
- Earbuds and Headphones
- Certain Toys
- Gaming Accessories
- Power Tools
Manufacturers are responsible for classifying their products as CBE. Retailers should consult directly with manufacturers if product classification is unclear.
Transactions Not Subject to the Fee
The CBE fee does not apply to:
- Sales for resale
- Sales to Native Americans in Indian country
- Shipments delivered outside California when the sale is not subject to California sales or use tax
Reporting and Remittance
Retailers must:
- File CBE fee returns quarterly through the California Department of Tax and Fee Administration (CDTFA) Online Services
- Remit fees by the last day of the month following each reporting period
- Submit the first return (January 1 – March 31, 2026) by April 30, 2026
Compliance and Enforcement
The program is jointly administered by:
- CDTFA
- CalRecycle
- Department of Toxic Substances Control (DTSC)
CalRecycle and DTSC may share product and compliance information with CDTFA to support administration and enforcement. Retailers should expect CDTFA audits to examine product classification accuracy, fee calculations and exemption documentation.
Your Guide Forward
Cherry Bekaert’s Sales & Use Tax team is here to help you navigate the new CBE Waste Recycling Fee requirements, including:
- Assessing potential CBE product classifications
- Updating tax engines and ERP configurations
- Supporting registration and workflow planning
- Preparing documentation for CDTFA inquiries
Connect with our team to explore the support options available for your business.
