Sales, Use and International Tax Activity Update - April 2009

Going Green Can Make Many Businesses Scream

The BNET Business Dictionary defines Green Taxes as fees and taxes levied to discourage behavior that will be harmful to the environment. While the issue has become global, we wanted to just provide a flavor of how some states are addressing the matter for selected products and industries.

Litter, Recycling Taxes and Fees

California – Imposes several waste control fees. The Electronic Waste Recycling Fee is charged to a purchaser of one of the Covered Electronic Devices at the time of sale when purchased from a California based establishment by any means, including in a store, by mail order, or over the Internet. The fees can range from $6 - $25 per device, depending on size. Products: Televisions that contain cathode ray tubes, computer monitors that contain cathode ray tubes, desktop and laptop computer monitors and TV’s with liquid crystal displays, plasma televisions, portable DVD players with LCD screens and any device that contains "Bare" cathode ray tubes.

For more information you can visit the California state Board of Equalization Website.

Nebraska - There are 7 categories of products that are identified as litter generating items. When businesses sell the items (in excess of $100,000 annually) they are taxed at the rate of $175 per $1,000,000 of gross proceeds. Categories: food for human consumption, food and beverages sold through a vending machine, food for pet consumption; cigarettes and other tobacco products, household paper and household paper products, cleaning agents, kitchen supplies.

For more information you can visit the Nebraska Department of Revenue Website.

New Jersey - Litter Control Fee Manufacturers, wholesalers, and distributors of litter-generating products pay an annual fee of 3/100 of 1% (0.03%) on all gross receipts from wholesale sales of such products in New Jersey. Retailers are charged at the rate of 2.25/100 of 1% (0.0225%) on all gross receipts from retail sales of litter-generating products. Exemptions are allowed for any retailer with less than $500,000 in annual retail sales of litter-generating products and for restaurants if more than 50% of their food and beverage sales are for on-premises consumption. Products that are subject to the fee include: beer, cigarettes, cleaning agents and toiletries, distilled spirits, food, glass containers, metal containers, groceries, tires, newsprint and magazine paper stock, nondrug drugstore sundry products, paper products, plastic and fiber containers, soft drinks, and wine.

For more information you can visit the New Jersey Department of the Treasury Website.

North Carolina - The white goods disposal tax is $3.00 and is applicable to all new white goods sold by a retailer or purchased outside North Carolina for storage, use, or consumption in North Carolina. The Fee applies to all new and some used “white goods” items. Products include: refrigerators, ranges, water heaters, freezers, unit air conditioners, washing machines, dishwashers, clothes dryers, and other similar domestic and commercial large appliances.

For more information you can visit the North Carolina Department of Revenue Website.

Virginia – there are approximately 13 categories of products sold by manufactures, wholesalers, distributors, or retailers that are subject to the annual Litter Tax at the rate of $10 or $15 per establishment. Categories include: Food for human or pet consumption, groceries, cigarettes and tobacco products, soft drinks and carbonated waters, motor vehicle parts, distilled spirits, wine, beer and other malt beverages, newspapers and magazines, paper products and household paper, metal and glass containers, plastic or fiber containers made of synthetic material, cleaning agents and toiletries, and non-drug drugstore sundry products.

For more information you can visit the Virginia.gov Website.

Washington State - there are 13 categories of products that are subject to the litter tax at rate of .00015 (0.015%) of the taxable amount. Categories include: food for human or pet consumption, groceries, cigarettes and tobacco products, soft drinks and carbonated beverages, beer and other malt beverages, wine, newspapers and magazines, household paper and paper products, glass containers, metal containers, plastic or fiber containers made of synthetic material, cleaning agents and non-drug drugstore sundry items.

For more information you can visit the Washington State Department of revenue Website.

Bottle Tax/Deposits

These Green type programs are currently found in 11 states where a fee is charged to the purchaser. The fee ranges in amounts from 2¢ to 15¢ per container: California, Connecticut, Delaware, Hawaii, Iowa, Massachusetts, Maine, Michigan, New York, Oregon, and Vermont. Other states have current legislative campaigns proposing new programs that may soon be implemented in these additional states: Florida, Maryland, New Hampshire, New Jersey, New Mexico, Tennessee and West Virginia.

The industries and products highlighted above seem to have a broad application to individual consumers shopping in a retail environment for home use or individual consumption. There are a plethora of other fees and taxes that affect selected industries and processes. While narrow in scope, environmentalists have made government aware of the need to regulate and generate fees or taxes to provide funding for cleanup and monitoring.

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