Was a separately stated electronic-waste recycling fee included in the retailer's taxable gross receipts?

Plain-English summary

A separately stated electronic-waste recycling fee was not part of the retailer's taxable gross receipts. The fee was imposed on purchasers of covered electronic devices, not on retailers.

By separately stating the fee on customer receipts as required, retailers were carrying out a statutory collection duty rather than passing one of their own business expenses to purchasers.

Citations and references

• California Revenue and Taxation Code sections 6012(a)(2) and 6051 (as cited)
• California Civil Code section 1656.1 (as cited)
• California Code of Regulations, title 18, section 1700 (as cited)
• California Public Resources Code section 42460 et seq. and Senate Bills 20 and 50 (as cited)
• Redacted corporation's email request for statutes and a written answer on whether the Electronic Waste Recycling Fee entered retailer gross receipts — email, sender, date, attachments, and complete text not reproduced in the official PDF
• December 23, 2004 Excise Taxes and Fees Division memorandum to Assistant Chief Counsel Janice Thurston requesting Legal Opinion #04-05, a chronology-file response, and an annotation if possible — memorandum only quoted in relevant part; complete memo and attachments not reproduced
• Covered-electronic-device purchases, separately stated fee receipts, and retailer fee collections under SB 50 — device records, receipts, invoices, fee returns, remittances, and accounting records not reproduced in the official PDF
• February 24, 2005 internal legal memorandum copied to six named Board staff members — no corporation response, operational guidance, return treatment, audit, assessment, refund claim, agency adoption beyond publication, appeal, or later outcome supplied
• Official Annotation 295.1237's section 6012(a)(2), purchaser-liability, separate-statement, retailer-collection, no-gross-receipts conclusion, February 24, 2005 date, and literal (2006-1) marker — annotation omits the corporation, email, December 23 memorandum, Legal Opinion number, chronology and annotation requests, sections 6051 and 1656.1, Regulation 1700, Public Resources Code and SB 20/50 references, copied staff, underlying records, later outcome, and reliance status and supplies no additional proceeding record

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/295-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/295-1237.pdf

Original ruling text

State of California

Board of Equalization
Legal Department-MIC: 82

Memorandum
295.1237
February 24, 2005

To :

Mr. Dennis Maciel, Chief
Excise Taxes and Fees Division (MIC:56)

Date:

From :

Randy Ferris
Senior Tax Counsel (MIC:82)

Telephone: (916) 322-0437

Subject:

CalNet 492-0437

Request for Legal Opinion #04-05
E-Waste Recycling Fee and Gross Receipts

This is in response to your December 23, 2004, memorandum to Assistant Chief Counsel Janice Thurston, which has been assigned to me for reply. In relevant part, you state: We have received a request via e-mail from K--- Corporation for the specific statutes which address the applicability of the Sales and Use
[T]ax [Law] to the Electronic Waste Recycling Fee (SB 20/50; Public Resources Code [PRC] § 42460 et seq.). K--- Corporation has asked for a written response to their inquiry[:] “. . . Is the Electronic Waste Recycling Fee includable in the retailer’s taxable gross receipts? . . . We are unable to find a specific statute that addresses this issue. Additionally, we would like a formalized response for our chronology files for historical purposes to memorialize the finding. . . . Please give us your legal opinion and annotate the opinion, if possible. DISCUSSION As you know, California imposes a sales tax on a retailer’s gross receipts from the retail sale of tangible personal property in this state, unless the sale is specifically exempt from taxation by statute. (Rev. & Tax. Code, § 6051.) This tax is imposed on the retailer who may collect reimbursement from the customer if the contract of sale so provides. (Civ. Code, § 1656.1; Cal. Code Regs., tit. 18, § 1700.) Taxable gross receipts include all amounts received with respect to the sale, with no deduction for the cost of the materials used, labor or service cost, or any other expense of the retailer passed on to the customer. (Rev. & Tax. Code, § 6012, subd. (a)(2).) As you also know, under SB 50, the e-waste recycling fee is imposed on the purchasers of covered electronic devices, not on the retailers who sell these items. Therefore, based on the

Mr. Dennis Maciel

-2-

February 24, 2005
295.1237

above-cited authorities, when retailers separately state the e-waste recycling fee on the receipts they issue to their customers (as mandated by SB 50), the retailers are not passing on expenses to the purchasers, but are merely executing their collection obligations under SB 50. I trust that this response provides the guidance the Division seeks. If any questions or concerns remain, please do not hesitate to contact me.

RMF:rmf
cc:

Lynn Bartolo (MIC:57)
Ed King (MIC:33)
Judy Nelson (MIC:82)
Monica Brisbane (MIC:82)
Janice Thurston (MIC:82)
Dave Rosenthal (MIC:50)