Point-of-Sale Fees in North America

If you buy a 50” flat screen TV in California, you might notice California Sales Tax is not the only additional charge on your invoice; there is also a $5 “eWaste” fee. Consumers can sometimes be caught off-guard by additional fees when checking out at the register, however retailers should always be aware of such point-of-sale fees and their responsibility to collect and remit them. California Point-of-Sale Fees Unlike the traditional concept of paying a fee when you bring your end-of-life junk TV to a recycling facility, the California “eWaste” fee is charged on the purchase of a new “covered electronic device” or CED at retail (point-of-sale). The fee provides funding for the recycling of end-of-life CEDs. In addition to televisions, CEDs in California include computer monitors, laptop computers, and portable DVD players with a screen. The fee amount varies based on the screen size, and can be adjusted based on economic assessment. Currently, California is the only US state that imposes an “eWaste” fee at point-of-sale. Still, retailers in the US are encountering other point-of-sale fees. For example, 26 states (including California) impose tire fees, 8 states (including California) impose paint fees, and retailers in D.C. will be required to charge paint fees starting on September 1, 2016. Less common point-of-sale fees in the US include mattress fees (Connecticut 5/1/2015; California 12/30/2015; Rhode Island upcoming in 2016) and light fees in Washington state (on mercury-containing lights). Canada’s Point-of-Sale Fees Companies doing business in neighboring Canada handle point-of-sale fees for a wider variety of products throughout Canada. The only Territory in Canada where such fees are not imposed is in Nunavut, which is the northernmost and least populated Canadian territory extending into the Arctic. In the other 2 northern territories, Yukon and Northwest, point-of-sale fees apply to bottled beverages, tires (Yukon), and electronic devices (Northwest Territories starting on February 1, 2016). The eWaste fee in Northwest Territories (NWT) covers more products than those in California; in addition to display devices, the NWT eWaste fee also applies to printers, fax machines, and scanners. In British Columbia, the eWaste fee further extends to computer peripherals, medical devices, e-toys, radios, video recorders, and a lot more. Large and small appliances such as refrigerators and coffee makers are also charged a point-of-sale fee. Periodic adjustments of the fee scope and amount, as well as implementation of new fee programs, are common in Canadian provinces. The following table summarizes major product-based point-of-sale fees in the US and Canada:

Point-of-sale fees are administered either by state government or by industry stewardships in the US.In Canada, the vast majority are administered by industry stewardships. Often, the fees are remitted and reported to a different agency from the tax department. However, fees cannot be ignored in your tax compliance. In Canada, point-of-sale fees are included in the tax base for federal and provincial sales taxes, with the exception of Saskatchewan. In the US,taxability of fees depends on the taxing jurisdiction and fee. For example, in California, the eWaste fee is exempt from sales tax, while the paint fee is taxable. Tire fees are exempt from sales tax in most states, but are taxable in Florida and Ohio. It is important to stay educated on the expanding frontier of point-of-sale fees. The ever expanding compliance responsibility for retailers in North America is no longer limited to the proper collection, reporting, and remittance of sales tax and shows no signs of slowing. Sign up to the Sovos blog as we continue to track these changes and bring you updates.