Industry Topics for California Tire Fee
Fee Application
The California Tire Fee (tire fee) is imposed on the purchaser (customer) of a new tire and collected by the retailer at the time of the sale. The retailer must report and pay the tire fee to us.
The tire fee charged to a customer must be separately stated on the invoice or receipt provided to the customer. Retailers may retain 1.5 percent of the tire fee collected as reimbursement for any costs associated with the collection of the fee.
Customers, who purchase new tires through an Internet transaction from an out-of-state seller for delivery in California without paying the tire fee, must pay the tire fee directly to us through our online services. Please see our Tax Guide for Marketplace Facilitator Act for more information.
Tires Subject to the Fee
New solid or pneumatic (a tire inflated or capable of inflation, with compressed air) tires intended for use with, but sold separately from:
- On-road or off-road motor vehicles (including trailers);
- Motorized equipment (lawn mower, golf cart, go-cart, etc.);
- Construction equipment; or
- Farm equipment.
New tires (including the spare) included with the purchase of:
- New or used motor vehicles (includes all-terrain vehicles (ATVs), motorcycles, and electric bicycles);
- New or used trailers drawn upon a highway or road;
- New or used construction equipment (tractor, backhoe, bulldozer, loader, etc.); or
- New or used farm equipment (combine harvester, baler, cultivator, picker, etc.).
Please Note: A new tire does not include retreaded, reused, or recycled tires.
All-Terrain Vehicles
Retailers of any type of new or used all-terrain vehicle (ATV, such as four wheelers and dirt bikes) that is intended for use on a highway or road are required to collect the tire fee on all new tires (including the spare tire) included with the sale of the ATV to the retail customer.
Also, sales of new tires that are sold to retail customers as replacement tires for ATVs are subject to the tire fee.
Electric Bicycle
Retailers of any type of new or used electric bicycle are required to collect the tire fee on all new tires (including the spare tire) included with the sale of the electric bicycle to the retail customer.
Also, sales of new tires that are sold to retail customers as replacement tires for electric bicycles are subject to the tire fee. Unlike traditional non-electric bicycles, electric bicycles are considered motor vehicles for purposes of the tire fee since they are not moved exclusively by human power.
Electrically Motorized Boards
Retailers of new or used electrically motorized boards are required to collect the tire fee on all new tires included with the sale.
An electrically motorized board as defined in Vehicle Code section 313.5 is any wheeled device that has a floorboard designed to be stood upon when riding that is not greater than 60 inches deep and 18 inches wide, is designed to transport only one person, and has an electric propulsion system averaging less than 1,000 watts, the maximum speed of which, when powered solely by a propulsion system on a paved level surface, is no more than 20 miles per hour. The device may be designed to also be powered by human propulsion.
An electrically motorized board can be legally operated upon a highway per Vehicle Code sections 21290-21296.
Please note: A motorized skateboard is different from an electrically motorized board. A motorized skateboard does not meet the definition in Vehicle Code section 313.5 stated above and is specifically excluded from use on a highway.
Motorized Equipment
Motorized equipment means and includes equipment intended for use on private property and not on a highway, as defined in Vehicle Code section 360.
Examples of motorized equipment include riding lawnmowers, riding snow blowers, go-karts, and golf carts. Tires for motorized equipment are only subject to the fee when sold separately from the equipment.
Trailers
Retailers of any type of new or used trailer (for example auto, horse, boat, equipment, 5th wheel, and travel trailers) that are towed on a highway or road are required to collect the tire fee on all new tires (including the spare tire) included with the sale of the trailer to the retail customer.
Also, sales of new tires that are sold to retail customers as replacement tires for trailers are subject to the tire fee.
Business Locations Outside of California
If you are required to have a California seller's permit or Certificate of Registration – use tax, you must register for a tire fee account and collect the tire fee when you sell tires to California retail customers.
Our online registration system will guide you through registering for an account. See our online guide, Use Tax Collection Requirements Based on Sales into California Due to the Wayfair Decision, for more information on whether you may be required to register for sales and use tax purposes.
If you are not required to register for a tire fee account, you may voluntarily register to collect and pay the tire fee as a courtesy to your California customers. Upon collecting the tire fee, you must provide the customer with an invoice or similar document that lists the tire fee as a separate charge. Both the seller and customer should retain a copy of the invoice or similar document.
If the out-of-state seller does not have a tire fee account, the California purchaser must pay the tire fee directly to us.
General Exemptions
The tire fee does not apply to the following sales:
- Sales for resale.
- Sales to Native American occurring on Indian reservations.
- Sales of new tires that the retailer ships directly to a location outside California when the transaction is not subject to California sales or use tax; however, the tire fee will apply if the buyer takes possession of the new tires in California.
In addition, tires not subject to the tire fee include tires intended for use or sold with:
- Any self-propelled wheelchair;
- Any motorized tricycle or motorized quadricycle designed for a person with a physical disability as defined in California Vehicle Code section 407; and
- Any vehicle that is similar to a motorized tricycle or motorized quadricycle and is designed to be operated by a person who, by reason of that person's physical disability, is otherwise unable to move about as a pedestrian.
Please Note: Sales to the United States Government are not exempt from the California Tire Fee.
Tire Fee Product Reference Chart
The chart below indicates when the sale of a new tire is subject to the tire fee. This chart is not all inclusive and is intended to provide helpful industry examples.
| Product Description | Replacement Tire (Sold Separately) | Product Sold with Tires |
|---|---|---|
| Aircraft Tires | Not Subject to Fee | Not Subject to Fee |
| All-Terrain Vehicle (ATVs) | Subject to Fee | Subject to Fee |
| Backhoe | Subject to Fee | Subject to Fee |
| Baler | Subject to Fee | Subject to Fee |
| Bulldozer | Subject to Fee | Subject to Fee |
| Chippers | Subject to Fee | Subject to Fee |
| Cultivator | Subject to Fee | Subject to Fee |
| Electric Bicycles | Subject to Fee | Subject to Fee |
| Electrically Motorized Boards | Subject to Fee | Subject to Fee |
| Forklift – Specifically designed for construction or agricultural purposes (Hydraulic Squeeze Forklift, Telescopic Handler, etc.) | Subject to Fee | Subject to Fee |
| Forklift – Standard | Subject to Fee | Not Subject to Fee |
| Go Karts | Subject to Fee | Not Subject to Fee |
| Golf Carts | Subject to Fee | Not Subject to Fee |
| Harvester (Combine, Picker, Stripper, Swather, etc.) | Subject to Fee | Subject to Fee |
| Lawnmower – Push with Motor | Not Subject to Fee | Not Subject to Fee |
| Lawnmower – Riding | Subject to Fee | Not Subject to Fee |
| Loader – Heavy Equipment | Subject to Fee | Subject to Fee |
| Log Splitters | Subject to Fee | Subject to Fee |
| Motorcycles | Subject to Fee | Subject to Fee |
| Motorized Skateboards | Subject to Fee | Not Subject to Fee |
| Motorized tricycle or quadracycle designed for people with disabilities or similar vehicle | Not Subject to Fee | Not Subject to Fee |
| Order Picker – Shelf Stocking Equipment/Cherry Picker | Subject to Fee | Not Subject to Fee |
| Paint Stripping Equipment | Not Subject to Fee | Not Subject to Fee |
| Paint Stripping Equipment – Trailered | Subject to Fee | Subject to Fee |
| Rototiller | Not Subject to Fee | Not Subject to Fee |
| Rototiller – Trailered | Subject to Fee | Subject to Fee |
| Self-Propelled Wheelchair | Not Subject to Fee | Not Subject to Fee |
| Snow blower – Riding | Subject to Fee | Not Subject to Fee |
| Snow blower – Self propelled | Not Subject to Fee | Not Subject to Fee |
| Tractor | Subject to Fee | Subject to Fee |
| Trailers | Subject to Fee | Subject to Fee |
- PRC 42885 (g) – For purposes of this section, “new tire” means a pneumatic or solid tire intended for use with on-road or off-road motor vehicles, motorized equipment, construction equipment, or farm equipment that is sold separately from the motorized equipment or a new tire sold with a new or used motor vehicle, as defined in Section 42803.5, including the spare tire, construction equipment, or farm equipment. “New tire” does not include retreaded, reused, or recycled tires.
Tires on Leased Vehicles
If you are in the business of leasing/renting new or used motor vehicles, trailers, construction equipment, or farm equipment and you purchase the vehicle/equipment on which new tires are mounted without paying the tire fee, you are responsible for paying and reporting the tire fee to us on those transactions. You are required to register for a tire fee account and report the tire fees owed.
If your customer decides to purchase the vehicle, trailer, construction equipment, or farm equipment at the end of the lease agreement (lease buyout), you are required to collect the fee from your customer on any new tires you mount on the vehicle or equipment at the time of the sale. If no new tires are mounted on the vehicle or equipment at the time of sale, or if used tires are mounted on the vehicle or equipment at the time of the sale, you should not charge your customer the fee.
Tire Replacement
A retailer may be required to collect the tire fee from their customers or manufacturers for the replacement of defective tires, a manufacturer’s tire recall, or tires replaced under warranty, as discussed below.
Defective Tires Returned or Manufacturers Recall
If the customer is not charged for new tires that are replacing defective tires, then the customer does not owe the tire fee on the replacement tires. Retailers should make sure that their records and invoices properly reflect these transactions as replacements of defective tires. However, if the customer has to pay the retailer any amount for the replacement tires, the customer owes the tire fee and the retailer must collect the tire fee from the customer.
If a manufacturer recalls the tires and instructs the retailer to provide replacement tires to customers at no cost and the manufacturer pays, reimburses, or gives credit to the retailer for the replacement tires, the manufacturer owes the tire fee on the replacement tires. The manufacturer is deemed to be the purchaser of the replacement tires, and the retailer of the tire must collect the tire fee from the manufacturer.
Tires Replaced Under Warranty
If the customer has to pay the retailer any amount for the replacement tires, then the customer owes the tire fee and the retailer must collect the tire fee from the customer. If the retailer does not charge the customer for the replacement tires, then the retailer must pay the tire fee owed directly to us.