Expanding Paint Stewardship in the U.S. and the imposition of the PaintCare and other Stewardship Fees
Product stewardship is a concept where those involved in the production, sale, and purchase of a product take up responsibility to reduce the environmental, health, and safety impact that may be associated with its usage and disposal. Stewardship organizations and their attendant responsibilities can be defined through either legislative or regulatory means. For a product producer, stewardship includes planning for, and if necessary paying for, the recycling or disposal of the product at the end of its useful life. For retailers and consumers, stewardship involves taking an active role in ensuring the proper disposal or recycling of a product.
Stewardship Fees
Using the model of product stewardship, one of the more interesting developments from a tax calculation and compliance perspective, is the expanding use of “stewardship fees.” The most familiar example of stewardship fees are those associated with the sale of bottled beverages (e.g. bottle deposits). However, these are absolutely not the only stewardship fee that manufacturers, retailers and consumers must concern themselves with.
Expanding Paint Stewardship programs in the United States
In 2009, Oregon became the first state to pass a Paint Stewardship law. The Oregon law was created through collaboration between government stakeholders and the American Coatings Association. The law was intended to serve as a pilot for industry-led programs to control the impact of leftover paint products. One of the more impactful results (from an organizational point of view) of the Oregon pilot program was the creation of PaintCare Inc., a non-profit organization established by paint producers to plan and operate Paint Stewardship programs in the United States.
Since 2009, eight states (CA, CO, CT, ME, MN, OR, RI, VT) have enacted law authorizing Paint Stewardship programs. Six of those eight states (CA, CT, MN, OR, RI, VT) have implemented and are carrying out their stewardship programs which include the imposition of point of sale Paint Stewardship Fees. The remaining two states (CO & ME) are projecting to implement their own programs by the end of 2015.
Prior to the enactment of Paint Stewardship programs, consumers had limited options when it came to disposing of unwanted leftover paint. These programs are intended to give consumers more options and make it more convenient to reduce the adverse environmental impact associated with such products.
As part of the Paint Stewardship programs administered by PaintCare Inc. a PaintCare Fee is added to the purchase price of paint being sold. These fees are paid to PaintCare Inc. by paint manufacturers, then passed down to retailers and eventually to customers. Unlike a bottle deposit, PaintCare Fees are not refunded to the individual returning leftover paint. Rather, the fees are used to fund the stewardship program (e.g. paint collection, transportation, recycling, public outreach, and program administration, and to manage old “legacy” paint).
PaintCare Fees – Point of Sale Paint Stewardship Fees
In an unusual but pleasant development from a compliance perspective, PaintCare Fees are currently uniform across all Paint Stewardship states. The fees are based on container size as follows (spray paint is not included):
• $0.00 Half pint or smaller
• $0.35 Larger than half pint to smaller than 1 gallon
• $0.75 1 gallon
• $1.60 Larger than 1 gallon to 5 gallons
Within the U.S., Stewardships have been similarly used to address the adverse environmental impact associated with mattresses (Connecticut) and light bulbs (Washington) and several states have long-standing fees that apply to the retail sale of tires, batteries, electronics, white goods, and similar products. While the concept of Stewardships may be growing quickly in the US, they are still far less pervasive here than in Canada where they apply, at the Provincial level, to a far wider set of products. However – that is a topic for another session.
Stewardship Fees: Tax Reporting and Remittance Obligations
Sovos Compliance is able to accurately support the imposition of the PaintCare and other Stewardship Fees in our systems, making it easier for our clients to meet their reporting and remittance obligations. For more information on Paint Stewardship you can visit: http://www.paintcare.org/
