Can an Arkansas tire shop charge customers a separate transportation or hauling fee on top of the state-mandated rim removal fee?

Plain-English summary

Representative Les Eaves asked AG Leslie Rutledge a question that pits the literal text of Arkansas's Used Tire Recycling and Accountability Act against the broader spirit of "one fee per tire."

Background. Arkansas tire retailers must collect a "rim removal fee" of $3 for each new tire that replaces one removed from a rim, or $1 for each used tire under similar circumstances (Ark. Code Ann. § 8-9-404(a)(3)(A)). The fee is remitted to the Department of Finance and Administration (DF&A), which audits compliance. Section 8-9-404(e) declares an "intent" that "only one (1) of the following fees imposed under this section be charged" for the rim-removal transaction: either the rim removal fee or the parallel "commercial generator fee" for fleet services.

Eaves told the AG that some tire retailers were charging an additional transportation or hauling fee on top of the rim removal fee. The hauling fee covered the actual cost of getting used tires to a recycling facility, and was charged only to customers who did not want to keep their used tires. He asked whether that practice violated the "one fee" rule, whether disguising the hauling charge as "miscellaneous parts and labor" eliminated the problem, whether retailers could pass the hauling expense to customers, and what DF&A's audit and enforcement powers were if the additional fee was illegal.

The AG read the statute closely. Section 8-9-404(e) talks about fees "for a tire" in the context of "removing a tire from a rim." The "one fee" rule is paired with § 8-9-404(a)(3)(B), which prohibits a tire retailer from charging "any other fee to a person who purchases the service of removal of a tire from a rim." So the prohibition is limited to fees for the rim-removal service itself.

A transportation fee is not for removing a tire from a rim; it is for hauling the used tire to a recycling facility, which is a separate service the statute itself acknowledges retailers must arrange (§ 8-9-404(a)(3)(C)). Section 8-9-404(a)(4) further contemplates that the rim removal fee will be added to "other invoice items" to calculate the total cost charged to the purchaser. Reading the statute "just as it reads" (Brock v. Townsell, 2009 Ark. 224, 309 S.W.3d 179; Weiss v. McFadden, 353 Ark. 868, 120 S.W.3d 545 (2003)), the AG concluded the Act does not prohibit a transportation fee.

That answer mooted the second and fourth questions. The third question had a separate part: did the appropriateness of charging for transportation depend on how the invoice was worded? The AG said no, with one constraint. The wording does not matter as long as the charge is clearly distinct from the rim removal fee. Section 8-9-404(a)(4) specifically requires rim removal fees to be separately stated on invoices. So the rim removal fee must always be a discrete line item; the transportation fee can be labeled however the retailer chooses.

Practical takeaway: Arkansas tire retailers in 2020 had statutory cover to itemize a hauling charge on top of the rim removal fee, and to do so without inviting a DF&A enforcement claim that they were collecting an unauthorized "fee" or unremitted "tax."

Currency note

This opinion was issued in 2020. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Why doesn't the 'one fee per tire' rule cover the transportation fee?
Because the rule is tied to the act of removing the tire from the rim, not to the broader transaction of buying and disposing of a tire. The statute uses tightly scoped language ("for the transaction of removing a tire from a rim that is related to the sale of a replacement tire"). A hauling fee covers a different service: getting the tire to a recycling facility.

Why must the rim removal fee be separately stated?
Because § 8-9-404(a)(4) requires it. The legislature wanted the rim removal fee to be visible on invoices so DF&A could audit compliance and consumers could see the state-mandated portion of their bill. The transportation fee has no analogous separate-statement requirement.

Can a retailer fold the transportation charge into a 'miscellaneous parts and labor' line?
The AG addressed this in Question 2 and said the answer was unnecessary because charging for transportation was permitted in the first place. The implicit answer: yes, the charge can be labeled however the retailer wants, as long as the rim removal fee is itself separately stated.

What if a customer wants to keep their used tires?
Then there is no transportation, and accordingly no transportation fee. The fee is a pass-through of an actual cost the retailer incurs only when the customer does not take the used tires home.

Could DF&A still audit a retailer for collecting a transportation fee?
DF&A's authority extends to the rim removal fee. The opinion did not address whether DF&A might audit other charges. Question 4 asked whether DF&A could assess a $3-per-tire tax for an unauthorized "fee," and the AG declined to address it because the underlying premise (illegality of the transportation fee) was wrong.

Is the answer different for fleet customers?
Section 8-9-404(d) imposes a "commercial generator fee" instead of the rim removal fee in connection with fleet sales. The "one of the following fees" rule in § 8-9-404(e)(1) makes those two fees mutually exclusive. The AG's analysis of the transportation fee would apply equally; it is not "one of the following fees imposed under this section," so it is not blocked.

Background and statutory framework

The Used Tire Recycling and Accountability Act, Ark. Code Ann. § 8-9-401 et seq., regulates how Arkansas handles used tires generated by retail sales. Section 8-9-404(a)(1) imposes the "rim removal fee" on the transaction of removing a tire from a rim that is related to the sale of a replacement. Section 8-9-404(a)(3)(A) sets the fee amounts ($3 for new replacement tires, $1 for used). Section 8-9-404(a)(3)(B) prohibits the retailer from charging any other fee "to a person who purchases the service of removal of a tire from a rim." Section 8-9-404(a)(3)(C) requires retailers to ensure that any tires they collect are transported to a permitted collection center, solid waste management facility, processing facility, or another tire retailer.

Section 8-9-404(a)(4) requires the rim removal fee to be separately stated on the invoice and contemplates that other invoice items are added together with the fee for the total cost.

Section 8-9-404(d) establishes a parallel "commercial generator fee" applicable to fleet sales. Section 8-9-404(e)(1) declares the intent that only one of the two fees (rim removal or commercial generator) be charged on a transaction. Section 8-9-404(e)(2) prohibits a tire retailer or generator from charging an additional fee for a tire if the customer establishes prior payment of one of the two fees.

Section 8-9-105 vests authority in the Arkansas Pollution Control and Ecology Commission for resolving violations of certain solid-waste-related provisions. The opinion declined to reach Eaves's enforcement-jurisdiction question because the underlying premise (illegality of the transportation fee) failed.

Citations

Statutes:

• Ark. Code Ann. § 8-9-401 et seq. (Repl. 2018 and Supp. 2019) (Used Tire Recycling and Accountability Act)
• Ark. Code Ann. § 8-9-402(2) (Supp. 2019) (definition of "commercial generator")
• Ark. Code Ann. § 8-9-404(a)(1), (3)(A), (3)(B), (3)(C), (4) (rim removal fee, prohibition on other rim-removal-service fees, transportation requirement, separate-statement requirement)
• Ark. Code Ann. § 8-9-404(d) (commercial generator fee)
• Ark. Code Ann. § 8-9-404(e)(1), (2) (one fee per rim-removal transaction; no additional fee on prior-paid tires)
• Ark. Code Ann. § 8-9-105 (Arkansas Pollution Control and Ecology Commission jurisdiction)

Cases:

• Brock v. Townsell, 2009 Ark. 224, 309 S.W.3d 179 (statute construed by plain meaning)
• Weiss v. McFadden, 353 Ark. 868, 120 S.W.3d 545 (2003) (cardinal rule of statutory interpretation)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2020-017
August 20, 2020
The Honorable Les Eaves
State Representative
102 Club Cove
Searcy, AR 72143-7440

Dear Representative Eaves:

STATE OF ARKANSAS
THE ATTORNEY GENERAL
LESLIE RUTLEDGE

This is in response to your request for an opinion concerning the Used Tire Recycling and Accountability Act (the "Act"), codified at Ark. Code Ann. § 8-9-401, et seq. (Repl. 2018 and Supp. 2019). As background for your questions, you note that the Act requires tire retailers to collect a "rim removal fee" from their customers. You note that the fees are remitted to the Department of Finance and Administration ("DF&A") monthly and DF&A conducts audits with respect to the fees. You further report that some tire retailers also charge their customers a "transportation or hauling fee." With regard to this latter charge, you state:

Some tire retailers charge their customers the Rim Removal Fee (generally $3) per tire sold, and additionally charge a transportation or hauling fee for the cost of actually facilitating the required disposal of the tires, but only to those customers who do not wish to keep their used tires. Those who wish to keep their used tires do not pay the additional transportation fee.

Against this background, you ask:

1) If the tire customers are informed of, and charged, the Rim Removal Fee, and are charged the additional "transportation fee," is this the type of fee that is intended to be prevented by Ark. Code Ann. § 8-9-404(e)(2) or similar statutes requiring that only one "fee" may be collected per tire sold?
2) Other tire retailers may include the expense of transporting the used tires under a different "miscellaneous parts and labor" description, but does that eliminate the problem of passing the expense to the customer?
3) Are tire retailers allowed to pass the expense of transporting used tires to the recycling facility, as required by statute, to the customer, and does its appropriateness depend on whether it is invoiced as a "fee" or worded differently?
4) If a DF&A audit determines that a tire retailer has collected an additional transportation "fee," and it is determined that the collection of this fee is prohibited by Ark. Code Ann. § 8-9-404(e)(2), does DF&A have the jurisdiction to assess tax (generally $3 per tire sold during the audit period) to the retailer for collecting the fee as a tax, but not remitting it to the state, or should any violations for collecting excess fees be resolved by the Arkansas Pollution Control and Ecology Commission, as discussed in Ark. Code Ann. § 8-9-105?

RESPONSE

The answer to your first question is "no," in my opinion. A fee that is charged to cover the expense of transportation is not prohibited by the Act. In light of this conclusion, responses to your second and fourth questions are unnecessary. The answer to the first part of your third question is "yes," the expense of transportation may be passed on to the customer. As for the second part of this question, the appropriateness of charging for the transportation expense does not depend upon the wording of the invoice, as long as it is clear that this charge is distinct from the rim removal fee.

DISCUSSION

Question 1: If the tire customers are informed of, and charged, the Rim Removal Fee, and are charged the additional "transportation fee," is this the type of fee that is intended to be prevented by Ark. Code Ann. § 8-9-404(e)(2) or similar statutes requiring that only one "fee" may be collected per tire sold?

The subdivision you have cited provides as follows:

(1) It is the purpose and intent of this section that only one (1) of the following fees imposed under this section be charged for the transaction of removing a tire from a rim that is related to the sale of a replacement tire:
(A) The rim removal fee; or
(B) The commercial generator fee.
(2) If a person establishes that he or she has paid one (1) of the fees for a tire, the tire retailer or tire generator shall not charge an additional fee for that tire.

As reflected by this provision, the "rim removal fee" is a service charge that must be paid to the tire retailer when a tire is being removed from a rim for a replacement tire. The fee is $3.00 "for each new tire that replaces a tire removed from a rim" and $1.00 "for each used tire that replaces the tire removed from the rim." A tire retailer is prohibited from charging "any other fee to a person who purchases the service of removal of a tire from a rim."

It is clear from these statutes that the rim removal fee, and hence the prohibition on "any other fee," relates to rim removal service. That is, based on the plain language of the subdivision you have asked about (Ark. Code. Ann. § 8-9-404(e)(2)), a tire retailer cannot charge more than the statutory fee for removing a tire from a rim.

The "transportation fee" you have asked about does not appear to relate to removing a tire from a rim. And another subdivision of section 8-9-404 expressly contemplates that the rim removal fee will be added to other invoice items to calculate "the total cost charged by the tire retailer to the purchaser." You state that this fee correlates to the actual cost to the retailer for transporting the used tires to recycling facilities. In my opinion, the Act does not prohibit charging a fee for that expense.

Question 2: Other tire retailers may include the expense of transporting the used tires under a different "miscellaneous parts and labor" description, but does that eliminate the problem of passing the expense to the customer?

A response to this question is unnecessary in light of my conclusion that a tire retailer is not prohibited from passing the cost of transportation to the customer.

Question 3: Are tire retailers allowed to pass the expense of transporting used tires to the recycling facility, as required by statute, to the customer, and does its appropriateness depend on whether it is invoiced as a "fee" or worded differently?

The answer to the first part of this question is "yes," as explained above. As for the second part, the appropriateness of charging for the transportation expense does not depend upon the wording of the invoice, as long as it is clear that this charge is distinct from the rim removal fee. The Act requires rim removal fees to be separately stated on invoices.

Question 4: If a DF&A audit determines that a tire retailer has collected an additional transportation "fee," and it is determined that the collection of this fee is prohibited by Ark. Code Ann. § 8-9-404(e)(2), does DF&A have the jurisdiction to assess tax (generally $3 per tire sold during the audit period) to the retailer for collecting the fee as a tax, but not remitting it to the state, or should any violations for collecting excess fees be resolved by the Arkansas Pollution Control and Ecology Commission, as discussed in Ark. Code Ann. § 8-9-105?

Given my conclusion that the Act does not prohibit a tire retailer from charging a fee to cover the cost of transporting the used tires, a response to this question is unnecessary.

Sincerely,

LESLIE RUTLEDGE
Attorney General