Hazardous Substances Taxes – Environmental Fee

The California Department of Tax and Fee Administration administers four (4) hazardous waste fee programs in cooperation with the Department of Toxic Substances Control (DTSC), pursuant to the requirements of the California Hazardous Substances Tax Law.

The Environmental Fee is a tax on businesses/organizations in industry groups that use, generate, or store hazardous materials or that conduct activities related to those materials. Activities related to hazardous materials may include the use of products such as ink, plastics, paint, etc., which were manufactured using hazardous materials. The tax applies to corporations, general partnerships, limited partnerships, limited liability partnerships, limited liability companies, and sole proprietorships that have 50 or more employees who are each employed more than 500 hours in California during the prior calendar year. The tax is graduated based on the number of employees. (commenced 7-1-89, H&SC section 25205.6.)

Special Notices

Information About

What is the hazardous waste environmental fee?

The hazardous waste environmental fee is imposed on certain corporations, general partnerships, limited partnerships, limited liability partnerships, limited liability companies, and sole proprietorships that have 50 or more employees who are each employed more than 500 hours in California during the prior calendar year. The California Department of Tax and Fee Administration (CDTFA) administers the hazardous waste environmental fee in cooperation with the Department of Toxic Substances Control (DTSC)

How are the hazardous waste environmental fee funds used?

The funds are used by the Department of Toxic Substances Control to support hazardous waste management in California including the review and analysis of past, present, or potential environmental public health effects related to toxic substances.

Who owes the hazardous waste environmental fee?

All businesses, unless otherwise exempted (see exemptions below), in certain industry groups, as identified by the Department of Toxic Substances Control (DTSC), that have 50 or more employees who are each employed more than 500 hours in California, during the prior calendar year, owe the hazardous waste environmental fee

Those identified businesses include all corporations, general partnerships, limited partnerships, limited liability partnerships, limited liability companies, and sole proprietorships that are using, generating, or storing hazardous materials or that conduct activities related to those materials.  Activities related to hazardous materials may include the use of products such as ink, plastics, paint, etc., which were manufactured using hazardous materials.

The DTSC has identified all but two industry codes as being subject to the hazardous waste environmental fee. The DTSC's Environmental Fee Regulation, R-2006-03 (Final Text) has definitions and other detailed information regarding the hazardous waste environmental fee. You may also view Pub 90, Environmental Fee for additional information on the hazardous waste environmental fee.

How is the hazardous waste environmental fee charged?

The hazardous waste environmental fee is based on the number of employees employed in California for more than 500 hours during the previous calendar year for which the hazardous waste environmental fee is due. The hazardous waste environmental fee increases based on the number of employees

Who is required to register with the CDTFA and pay the hazardous waste environmental fee?

All corporations, general partnerships, limited partnerships, limited liability partnerships, limited liability companies, and sole proprietorships identified by the Department of Toxic Substances Control that have 50 or more employees who are each employed more than 500 hours in California during the prior calendar year.

Are parent corporations/organizations required to register and file returns?

Parent corporations/organizations should contact their wholly-owned subsidiaries to find out if they are registered with the CDTFA. If their wholly-owned subsidiaries are not registered with the CDTFA, the parent corporation/organization must file for their subsidiary on the parent's return. A subsidiary corporation/organization that is registered with the CDTFA under its own account number should file hazardous waste environmental fee returns separately.

Are Professional Employment Organizations (PEO) considered employers for the purposes of the hazardous waste environmental fee?

Yes. Both the Department of Toxic Substances Control and the Employment Development Department recognize Professional Employment Organizations (PEOs) as employers. PEOs are responsible for paying the hazardous waste environmental fee as long as the PEO has a valid contract with its client. The PEO should include its clients' qualified employees in its total employee count in order to determine the correct hazardous waste environmental fee due to the CDTFA.

If a PEO chooses to report each of its clients' employees separately using the client's own EDD number to establish that company's State Unemployment Insurance rate, that client will need to have its own CDTFA account number since it is now reporting those employees under its own EDD number.

How do I register with the CDTFA?

Go to the CDTFA online registration system. The system is convenient, secure, and available 24 hours a day. See Information Needed to Get Started for help to complete your application.

You may also register in person at one of our office locations by use of a kiosk or forms available upon request. If you have questions, please contact our Customer Service Center at 1-800-400-7115 (TTY: 7115), Monday through Friday, 8:00 a.m. – 5:00 p.m. Pacific time, excluding state holidays.

Do I need to register with any other agency?

Check with other state, federal, and local taxing and licensing authorities about any other registration requirements.

The Governor's Office of Business and Economic Development (GO-Biz) offers extensive information on state, local, and federal permit requirements. For a listing of its assistance centers, visit the GO-Biz website.

Visit Calgold for help with permit and licensing requirements for other state, federal, and local authorities (for example, you may need to be registered with the Franchise Tax Board or the Employment Development Department.

Also, visit California's Tax Service Center. You may also want to consult a tax professional for assistance with other agencies' requirements.

How do I contact the CDTFA if my business changes or I need additional information?

Feepayers should notify the CDTFA of any change of business ownership, email address, mailing or location address, or phone or fax number, to ensure that returns and information about the hazardous waste environmental fee are received timely. Use form CDTFA-345-SP, Notice of Business Change, Special Taxes and Fees Accounts, to notify the CDTFA of changes.

You may also contact the CDTFA Customer Service Center at 1-800-400-7115 (TTY: 711) and select the option for "Special Taxes and Fees" or send a message through our website at Email Your Tax Questions.

What is the current hazardous waste environmental fee rate?

The hazardous waste environmental fee rates are set by statute (Health and Safety Code section 25205.6). The current and historical fee rates can be viewed on CDTFA's Tax Rates webpage.

The rates are adjusted annually to reflect increases or decreases in the cost of living as measured by the Consumer Price Index (CPI) issued by the Department of Industrial Relations. It is important for you to keep your account information current with the CDTFA so we can notify you of rate changes.

Hazardous waste environmental fee rates are also listed on the Department of Toxic Substances Control Department of Toxic Substances Control's Fee Summary webpage.

Are there any exemptions from the hazardous waste environmental fee?

Yes. Businesses/organizations with less than 50 qualifying employees are not subject to the hazardous waste environmental fee. The following organizations are also exempt:

  • Private households (Standard Industrial Classification (SIC) code major group 88).
  • Nonprofit residential care facilities SIC code 8361 or North American Industry Classification System (NAICS) codes 623312, 62322, and 62399).
  • Insurance companies that pay a tax on gross premiums in lieu of all other California taxes and licenses.
  • Banks that pay a tax on net income in lieu of all other California taxes and licenses.
  • Non-profit credit unions.
  • U.S. Government agencies and instrumentalities.

What are SIC codes?

Standard Industrial Classification (SIC) codes have been established by the U.S. Department of Commerce and are used to designate the activities of business operations.  Only organizations in specific SIC codes are exempt from the hazardous waste environmental fee (Health and Safety Code section 25205.6).

How do I determine the number of employees for the hazardous waste environmental fee?

The number of qualifying employees is determined by counting the number of employees who are employed in California more than 500 hours. This includes vacation, sick leave, and holidays for which an employee is paid during their employment.

If a person terminates employment, vacation, sick leave, holidays or other severance pay are not included when calculating the number of hours.

Should an employee's paid travel time be used in the calculation of the 500 hours?

Yes. An employee's paid travel time should be included in the calculation of the 500-hour threshold that an employee is employed.

For example, travel time on an airplane should be included in the calculation of hours paid if the employee is paid for that time.

Should the number of hours worked in-state and out-of-state be prorated to determine the number of hours worked in California?

No. If the organization reports employees to the EDD in California, the hours worked in California should be calculated based on the total number of hours paid by the organization, regardless of the number of hours the employee works in California or out-of-state. The number of hours should not be prorated between in-state and out-of-state to determine hours worked.

If an employee is reported to another state's EDD, that person is not considered employed in California regardless of the number of hours the employee actually works in this state.

When is the hazardous waste environmental fee return and payment due?

The Hazardous Waste Environmental Fee return (CDTFA-501-EF) and payment are due annually on or before the last day of the second month following the end of the calendar year for which the hazardous waste environmental fee is due. For example, the 2017 return is due February 28, 2018.

You must file the return and pay any amount due by the due date. A delinquent return, failure to pay by the due date, or a late payment will result in penalty charges.

The CDTFA mails your return to the address listed on your account. All registered feepayers should receive a return within 15 days of the due date. If you do not receive a return, please contact our Customer Service Center at 1-800-400-7115 (TTY: 711) Monday through Friday (except state holidays) 8:00 a.m. to 5:00 p.m. (Pacific time), and select the option for Special Taxes and Fees or email your question to Email Your Tax Questions.

Returns and/or payments must be postmarked by the due date to be considered timely. If the due date falls on a Saturday, Sunday or state holiday, returns and/or payments postmarked or received by the next business day will be considered timely.

How do I pay the hazardous waste environmental fee?

Several options are available to make a payment including: directly online from your bank, credit card, check, or money order, and some of our customers are required to make payment through Electronic Funds Transfer (EFT). Please note that a service fee of 2.3% of the transaction amount will be charged by the credit card processing vendor. This service fee is retained by the vendor and is not revenue to the California Department of Tax and Fee Administration. The minimum fee is $1.00.

You may also submit payment with your return. Make your check or money order payable to "California Department of Tax and Fee Administration." Write your account number on your check or money order and make a copy for your records.

Am I required to pay the hazardous waste environmental fee by electronic funds transfer?

No. The hazardous waste environmental fee is below the threshold average of the $20,000 or more per month requirement for mandatory payment by Electronic Funds Transfer (EFT). See our EFT Quick Reference Guide – Special Taxes for detailed information.

How long do I need to keep records?

Records must be retained for at least four years from the time the hazardous waste disposal fee is due unless the CDTFA authorizes you in writing to destroy them sooner. For additional information regarding record retention please view Regulation 4901.

How do I claim a refund of the hazardous waste disposal fee?

If you have overpaid the hazardous waste disposal fees directly to the CDTFA, you may file a claim for refund by using form CDTFA-101, Claim for Refund or Credit, or by filing an amended return(s) stating the specific reason(s) for the overpayment. Claims for refund must be in writing, signed by the owner or an authorized representative, state the reason for the overpayment, specify the period for which you made the overpayment, and the amount of the refund requested. Additional refund details can be found on the CDTFA's Special Taxes Claims for Refund webpage.

Mail claims to:
California Department of Tax and Fee Administration
Appeals and Data Analysis Branch (MIC: 33)
P.O. Box 942879
Sacramento, CA 94279-0033

How long do I have to file a refund claim for the hazardous waste disposal fee?

Whichever of the following dates occurs last is your filing deadline:

  • Three years after the due date of the return on which you overpaid the fee
  • Six months after you overpaid the fee
  • Six months after the date a determination (billing) became final
  • Three years after the CDTFA collected an involuntary payment, such as from a levy or lien

Be sure to file your claim for refund by the applicable deadline. If you don't file on time, the CDTFA cannot consider your claim, even if you overpaid the fee. If you have questions about your deadline to file a refund claim, contact our Customer Service Center at 1-800-400-7115.

Registration

Rates

The fees are adjusted annually and approved by the CDTFA to reflect increases or decreases in the cost of living as measured by the CPI issued by the Department of Industrial Relations. Current rates are posted on the CDTFA website on the above link.

Returns & Reports

Make a Payment

Forms & Publications

Resources

Related Websites

Contact Us

If you have questions regarding this program or need to register with the CDTFA, please contact Special Taxes and Fees at the following address or telephone number:

Special Taxes and Fees. MIC: 88
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0088

Telephone 1-800-400-7115
(TTY: 711)

Email Your Tax Questions