Advance Recycling Fees Up for Discussion

Electronics retailers are quietly pondering their regulatory options at the news that the State of California will not be able to effectively collect the $4-8 environmental fee (advance recovery fee or “ARF”) on cathode ray tubes (and LCD and plasma devices) on mail-order and Internet sales companies outside the state.

The Board of Equalization made the ruling at the end of November. One major retailer said they were considering support for state advance recovery fees but now they cannot because it is an unfair advantage to Internet companies over brick and mortar retailers.

A source at the California Board said there is no way the state can know when these sales are made. Technically, the consumer is liable for the CRT fee, and an out-of-state seller can voluntarily register and collect fees from their California customers.

Since this is the first ARF in the nation, there are no other precedents. The source points out that even though this is not technically fair to regular retailers, it is less money than the regular 8% sales tax that such mail order sellers are not collecting now on electronic items.

The Board has estimated that it will eventually need about 68 people to handle fee collection and audits on the new ARF, though they have only added 15 people so far. The fee is expected to involve 75,000 registrants. Sources also stress than since Dell Computer Co. has a nexus in California it will be collecting the fee from its customers anyway.

Ted Smith, who is stepping down as head of the Silicon Valley Toxics Coalition, acknowledged that the current fee collection situation is “a mess”.

He also admitted that that money flow in California is cumbersome. Smith felt some of the issues on fee collection could be addressed in future legislation, though others are skeptical.

Smith said the group prefers to support a simple takeback mandate like the one in Maine.

Meanwhile, the Computer Takeback Campaign has decided to take aim at Apple Computer, based on its surveys. Smith felt the other coalition members (e.g. Panasonic, IBM, Sony and others) were trying to get out of paying for historic e-waste by pushing the visible fee concept.

The new campaign features amended Apple graphics with titles like From iPod to iWaste. The environmentalists have already protested at Apple headquarters, claiming Apple is doing little on the recycling front, and they took their case to MacWorld, a major California conference January 13.

Meanwhile, the state will begin collecting the ARF fees from regular retailers this month.