This blog was last updated on September 11, 2025

Starting January 1, 2026, California sellers will be required to register, collect, and remit a new Covered Battery-Embedded (CBE) Waste Recycling Fee on the sale of new and refurbished electronics that have non-removable batteries. The fee (the initial amount yet to be established by Cal Recycle) applies to all products having a battery “from which the battery is not designed to be easily removed with no more than commonly used household tools.”

What is the Covered Battery Embedded (CBE) Fee?

This new requirement’s stated purpose is to pay for programs that keep batteries out of the standard waste stream. Beyond the new fee, the new rules also require manufacturers to list covered and non-covered products in an annual notice to Cal Recycle and mandates that covered products be labeled with the manufacturer’s name and include information identifying the battery chemistry – either directly on the product or on the manufacturer’s website.

California CBE Registration and Compliance Requirements

Under the law, every person “engaged in the business of selling CBE products” must register with the California Department of Tax and Fee Administration (CDTFA) to collect the fee. This requirement also applies to Marketplace Facilitators, who are responsible for collecting sales tax on transactions on behalf of marketplace sellers. Consumers who buy these products for personal or business use but do not pay the fee at the time of sale must also register and self-assess the fee. The fee amount is subject to annual changes. Fee changes are to be announced in October, becoming effective the following January.

This new requirement was passed into law as part of California SB-1215 and represents an extension of the existing Covered Electronic Waste Recycling Program, which imposes point-of-sale fees on certain video display devices based on screen size. Items already subject to a fee under the existing program are excluded from this new fee, as are certain medical devices, energy storage systems, and electronic nicotine delivery systems.

CDTFA specifies that returns for this new fee will be filed online on either an annual or quarterly basis, with returns and payments due on or before the last day of the month following the reporting period. California will likely modify the existing Electronic Waste Recycling Fee Return to support this new levy. The fee will almost certainly be required to appear explicitly on customer invoices, as is the case with the existing covered electronic devices. The fee itself is not included as part of the tax base when calculating proper state and local sales tax.

Fees as Part of the Tax Compliance Tapestry

The concept of imposing point-of-sale fees on certain products to enable end-of-life recycling is well-established. States across the country impose similar fees on tires, batteries, paint, lumber, mattresses, lightbulbs, paper and plastic bags, as well as beverage containers. While no U.S. state currently imposes a fee on devices having embedded batteries, it is not surprising to see California lead the way, as they already charge most of the above-mentioned fees today. U.S. states are not alone in this approach. Many Canadian provinces have enabled local stewardship organizations to administer similar fees on various consumer products and devices.

Key Compliance Questions for Sellers

Whenever a state adopts a new fee, there are several important questions that need to be answered to enable seller compliance, including:

• Will the fee be reported on a new form or will an existing return be modified to include the fee?
• Will the fee be administered by the state Department of Revenue, a separate environmental agency, or a quasi-public stewardship organization?
• How often will the fee amount change?
• Will fee changes be conspicuously posted?
• Does the fee become part of the sales tax base?
• Are marketplace facilitators required to collect the fee or will fee compliance always fall to the direct seller?
• Are out-of-state sellers required to collect the fee?
• If the final customer is exempt from sales tax (e.g., government entities), does the fee still apply?
• Is the fee refunded if the item is returned?

Given California’s considerable experience with point-of-sale fees, they address most of these complexities reasonably well. Since this is their second foray into electronics recycling fees, they can also leverage their existing compliance infrastructure for filing and remittance. However, this doesn’t mean the fee isn’t complex and does not require immediate attention from sellers to ensure they will be able to comply come January 1.

Complexities of the California Battery Fee

The primary operational challenge centers on product classification. California’s fee depends on whether a battery can be “easily removed” with “commonly used household tools,” terms requiring consistent interpretation across thousands of products. The precise boundaries of these criteria will likely be defined through regulatory guidance or litigation.

Consider electric toothbrushes. Currently, sellers can classify all models identically for tax purposes. To support this new fee, they need separate categories for removable battery models (no fee) versus embedded battery models (fee applies). This reclassification requirement extends across all electronic product categories including smartphones, wireless earbuds, smart watches, gaming controllers, portable speakers, and many other devices, all of which require individual assessment and proper categorization to ensure accurate fee application.

What Sellers Should Do Next

Now is the time to prepare for compliance. Consider the following steps to begin preparing:

• Conduct a product audit. Identify which items have embedded batteries and establish reliable methods for distinguishing between removable and non-removable batteries across your inventory.
• Assess system capabilities. Verify that your e-commerce platform, ERP system, and/or tax engine can handle the new product classification requirements.
• Engage with your tax automation provider. If you outsource tax compliance, confirm they are developing support for this fee both with respect to determination and also with respect to remittance and reporting.
• Plan for evolving requirements. The initial fee is still undetermined, and once it is set, it’s subject to change every year. You should also account for the types of products covered by this fee to expand and evolve.
• Prepare for other states to follow California’s lead. While no other states have similar fees scheduled to take effect as of today, it is possible that other states will implement comparable battery programs in the future as environmental concerns continue to drive policy changes.

Rather than treating California’s new battery fee as an isolated requirement, sellers should view this as an opportunity to build robust, scalable processes for handling evolving and expanding compliance changes. The trend toward product-specific recycling fees is well established and likely to continue expanding as states seek to secure funding for environmentally friendly waste disposal programs.

Building comprehensive capabilities now, including advanced product classification systems and automated fee calculation tools, will provide a competitive advantage as the regulatory landscape becomes increasingly complex. Talk to a Sovos tax expert today to future-proof your compliance strategy.

FAQ: California Embedded Battery Fee

Which products are subject to California’s CBE fee?

Any new or refurbished electronic device with a battery that cannot be easily removed using common household tools is covered. Examples include smartphones, earbuds, smartwatches, and gaming controllers.

Do marketplace facilitators have to collect the California battery fee?

Yes. Marketplace facilitators are required to register and collect the embedded battery fee on behalf of third-party sellers, similar to their sales tax obligations.

Is the California embedded battery fee included in sales tax?

No. The fee must be listed separately on invoices and is not part of the state or local sales tax base.

Are out-of-state sellers required to collect the fee?

Yes. Any business selling covered products to customers in California must register with the CDTFA and collect the fee, even if they are not physically located in the state.