California’s New Covered Battery Embedded Waste Recycling Fee: What Businesses Need to Know About Form L-990

As technology evolves, so do the environmental challenges that come with it. From smartphones and laptops to smart home devices, most electronics today are powered by embedded, non-removable batteries. These types of batteries are hard to detach from the device; thus, the process of their proper recycling is complicated and expensive.

As a solution to this problem, a new Covered Battery Embedded (CBE) Waste Recycling Fee that will become effective on January 1, 2026, was announced by the California Department of Tax and Fee Administration (CDTFA). Businesses that sell certain electronics in California will need to collect, report, and remit this fee using Form L-990.

This blog simplifies the meaning of this fee, who will be impacted, and how businesses should begin to prepare to make sure they comply.

What Is the Covered Battery Embedded Waste Recycling Fee?

The CBE Waste Recycling Fee is designed to fund the safe and responsible recycling of electronic devices with batteries that cannot be easily removed by consumers using ordinary household tools.

These types of products include many of today’s most popular electronics, such as:

• Smartphones and tablets
  
• Laptops and smart watches
  
• Wireless headphones and earbuds
  
• Power banks and rechargeable tools
  
• Smart home devices and wearables

These devices release toxic elements such as lithium and heavy metals when they are disposed of, making the embedded batteries quite hazardous to the environment. The new charge is a guarantee that manufacturers and retailers will fund a state-run initiative to safely dispose of and recycle this waste.

Why This Matters: Key Goals of the L-990 Program

California is taking a proactive step to address the rising e-waste problem. The CBE Waste Recycling Fee has three main goals:

1. Promote Environmental Sustainability: Funding for proper recycling reduces toxic landfill waste and supports California’s green initiatives.
   
2. Shift Responsibility to Businesses: Instead of leaving disposal entirely to consumers, manufacturers and sellers share responsibility for recycling costs.
   
3. Ensure Transparency in Pricing: By separating the fee on receipts and invoices, consumers are made aware of the environmental cost of their purchases.
   

Who Needs to File Form L-990?

The responsibility for reporting and remitting the fee falls primarily on:

• Manufacturers who sell covered battery-embedded products in California.
  
• Retailers, including online sellers and marketplaces.
  
• Importers and distributors who bring CBE products into California for sale.

If you fall into any of these categories, you are required to register with CDTFA, collect the fee at the point of sale, and file Form L-990 on a regular reporting schedule.

How the Fee Will Be Applied

• Effective Date: January 1, 2026
  
• Scope: Provisions under the Scope apply to all new electronic devices containing non-removable batteries sold in California.
• Collection: It should be collected at the moment of sale, and the fee should be indicated as a distinct line-item on receipts or invoices.
  
• Remittance: Under Form L-990, businesses are required to remit the amounts that are collected to CDTFA.
  

The precise charges will be declared in each category of device closer to the effective date. Businesses can start preparing by going through their product catalog to determine which of their products are eligible to be Covered Battery Embedded (CBE) products.

Preparing Your Business for Compliance

Waiting until 2026 to act could leave your business scrambling. Here’s how to get ahead:

1. Identify Covered Products

Create a detailed list of all products in your catalog that contain non-removable batteries. Pay attention to:

• Smart devices
  
• Rechargeable tools
  
• Wearable technology
  

2. Update Your POS and Accounting Systems

Your systems must be able to:

• Add the new fee automatically at checkout.
  
• Display the fee as a separate line item on receipts.
  
• Generate reports for accurate filing on Form L-990.
  

3. Train Your Staff

Educate your accounting, sales, and compliance teams on:

• How to identify covered products.
  
• Properly collecting and recording the fee.
  
• Filing requirements and CDTFA reporting deadlines.
  

4. Plan for Consumer Education

The new fee will probably appear on the receipt of consumers. Make marketing or in-store material that clarifies the environmental advantage and compliance objective of this fee.

Environmental and Business Benefits

While this new requirement may seem like just another compliance task, it also brings potential benefits:

• Protects Brand Reputation: Demonstrates your commitment to sustainability.
  
• Reduces Liability: Avoids fines or penalties for improper disposal practices.
  
• Motivates Consumer Confidence: Customers are increasingly shifting towards socially responsible brands that take care of the environment.
  

That can make compliance a marketing benefit by making your business a responsible recycling leader.

Key Deadlines and Action Steps

How TaxProNext Can Help

Navigating new tax requirements like the CBE Waste Recycling Fee can be overwhelming, especially for businesses with complex product lines or multiple sales channels.

At TaxProNext, we specialize in:

• Environmental fee compliance and reporting.
  
• Sales tax and e-waste fee consulting.
  
• Smoother compliance processes that can be integrated into your systems.
  
• Employee training and record keeping on Form L-990 and associated CDTFA filing.

With us, you can keep ahead of deadlines and work on your business, leaving the details to us.

Conclusion

California's Covered Battery Embedded Waste Recycling Fee is a big step towards reducing e-waste and protecting the environment.. It also creates an extra complicating factor for businesses that sell electronics with removable batteries.
You can use compliance as a way to build a stronger business and brand by learning how to comply with Form L-990, acting now, and having expert help to support the learning process.

Stay proactive, adhere to regulations, and support California's efforts to create a more environmentally friendly future.

Call to Action

Need help preparing for the new CBE Waste Recycling Fee?
TaxProNext offers a free consultation now, so call us to make sure that your business is prepared before the deadline of January 2026.