Effective Jan. 1, 2026, retailers doing business in California — including automotive dealerships — must comply with the newly established Covered Battery-Embedded Products (CBE) Waste Recycling Fee, administered under Senate Bill (SB) 1215. Retailers must register with the California Department of Tax and Fee Administration (CDTFA) and collect the CBE fee at the point of sale or lease of applicable products.

The program is jointly overseen by CDTFA, CalRecycle and the Department of Toxic Substances Control (DTSC). It is intended to support statewide recycling of electronic products containing non-removable batteries. The new law expands the existing Electronic Waste Recycling Act of 2003 to include these “covered battery-embedded products.”

What Is a Covered Battery-Embedded Product?

Covered battery-embedded product means “a product containing a battery or battery pack that is not designed to be removed from the product by the consumer” (California Public Resources Code § 42464(d)(1), as amended by SB 1215, 2022).

What You Need to Know

• CDTFA has confirmed that retailers should reach out to their manufacturers to check which of the products they carry are subject to the CBE fee.
• Manufacturers must make this determination, share it with their retailers and provide an annual list to CDTFA.
• Fixed ops should determine which products you sell or lease that contain an embedded battery.
• Tax folks should determine the fee that is to be collected from customers.
• Accountants should create an account where the fee is to be routed.
• DMS should be set up to create language for the line item on invoices.
• Parts and service staff should be trained to explain the fee to customers.
• The business office must pay the CBE fee to the state on a quarterly basis.
• The CBE recycling fee generally does not apply to items replaced under a factory (mandatory) warranty. However, it applies to items replaced under an optional (extended) warranty.
• Dispose of CBE like your other e-waste. Set up for recycling and keep out of regular trash.

View CDTFA’s Covered Electronic Waste Recycling Fees Guide.

Examples of CBE at Dealerships

• Consumer electronics
• EV-related accessories
• Diagnostic or programming devices
• Electronic tools or service accessories
• Tire Pressure Monitoring Systems (TPMS)
• Smartphones, tablets and similar sealed battery devices

Note: Key fobs are not considered CBE because they contain batteries that are designed to be easily removed by the user with common household tools.

More About TPMS Sensors

Many TPMS sensors contain sealed lithium batteries that are not easily user-replaceable. This design places TPMS within the scope ofa CBE. As of early March, while no TPMS manufacturer has releasedofficial SB 1215 guidance, CalRecycle has provided guidance tomanufacturers to help identify which products are classified as CBE. View CalRecycle’s Guidance for Manufacturers and Retailers. 

Dealerships should prepare for potential inclusion and closely monitor manufacturer updates.

Exclusions

The following are not classified as CBE:

• Certain medical devices
• Covered electronic devices (already subject to California’s e-waste fee)
• Certain energy storage systems
• Certain electronic nicotine delivery systems

The following transactions are not subject to the CBE waste recycling fee:

• A sale for resale
• A sale to Native Americans on Indian country
• A sale of CBE products that the retailer ships directly to a location outside California when the transaction is not subject to California sales or use tax. The fee will apply if the buyer takes possession of the CBE products in California.

CBE Fee Rates

CalRecycle has now finalized the 2026 fee structure. This will be revised annually in October and will take effect Jan. 1 of the following year.

• 1.5% of the retail sales price
• Capped at $15 per product
• Effective Jan. 1, 2026
• Dealership POS systems will need to incorporate the percentage-based calculation and the per-item cap. They may retain 3% of the CBE waste recycling fee collected to reimburse all fee collection costs.

Registration Timeline

CDTFA opened online registration for the CBE Waste Recycling Fee account on Nov. 19, 2025. Dealerships without CDTFA credentials (username, password or seller’s permit) must create them using the “Sign Up Now” feature in the CDTFA Online Services Portal.

Filing Requirements and Due Dates 

Returns and payments are due on the last day of the month following each calendar quarter. For example, the first required reporting period was for the first quarter, Jan. 1 through March 31, for which the return and fee payment were due on or before April 30. The return is due on either a quarterly or yearly filing basis, and filing frequency is assigned when you register. You are required to file a return even if you did not have any reportable activity or do not owe an amount during the reporting period. 

Dealership Responsibilities

• Fee collection at POS (including leases)
• Filing CBE returns at assigned frequency
• Timely remittance of fees to CDTFA
• Retain 3% of fees as reimbursement for all fee collection costs
• Inventory review and system updates

Non-compliance may result in CDTFA penalties, interest and enforcement action.