California Tire Fee Guide

The California Tire Fee is assessed on the retail purchase of new tires intended for use with, but sold separately from, on-road or off-road motor vehicles, trailers, motorized equipment, construction equipment, or farm equipment. The fee also applies to new tires (including the spare) sold with the retail purchase of new or used motor vehicles, trailers, construction equipment, or farm equipment.

See Industry Topics tab for a more detailed list of tires that are or are not subject to the tire fee.

Online registration is an easy and convenient way to register for a California Tire Fee account. Register online with us for a Tire Fee account by selecting Register a New Business Activity.

Who is required to register?

You must register with the California Department of Tax and Fee Administration (CDTFA), collect the tire fee, file a return, and pay the fee to CDTFA if you are a:

• California retailer that sells new tires, including new tires on new or used motor vehicles, farm equipment, construction equipment, or trailers drawn upon a highway or road; or
  • Beginning January 1, 2022, a retailer includes a marketplace facilitator selling new tires through its marketplace.
• California retailer (lessor) that leases/rents new or used motor vehicles, farm equipment, or construction equipment that include new tires; or
• Purchaser (consumer) who purchases new tires for personal or business use, but does not pay the tire fee at the time of purchase, including a:
  • Purchaser (consumer) that purchases a new tire from an out-of-state seller that does not charge the tire fee.
  • Retailer who becomes a purchaser (consumer) by removing new tires from inventory for purposes other than retail sale or resale or by renting, for periods of four months or less (for example, short-term car rental companies), for use with motor vehicles, trailers, farm equipment, or construction equipment on which new tires were mounted (including the spare).

Notes

1. Please see Assembly Bill (AB) 1402 (Stats. 2021, ch. 421) and our Tax Guide for Marketplace Facilitator Act for more information.

Visit our Tax Rates - Special Taxes and Fees page to view current and historical rates for the California Tire Fee.

File your return online - CDTFA's online filing service is easy, fast, and free.

You may file your CDTFA-501-TF, California Tire Fee Return, and pay the fee online. The tire fee return and payment are due on or before the 15th day of the month following each reporting period. For example, if your reporting period is for the first quarter (January thru March), the return and fee payment is due on April 15th. The CDTFA-501-TF is due either on a quarterly or yearly filing basis. Your filing frequency is determined at the time you register.

You are required to file a return even if you did not have any reportable activity during the reporting period.

Filing a late return and/or late payment may result in a late penalty and/or interest assessment. See Penalty and Interest topic in this section.

Payment

You may file and pay your tire fees online. Visit our website to make a payment and learn about our various payment options.

If your average monthly fee payment is $20,000 or more, you are required to pay by Electronic Funds Transfer (EFT). CDTFA will notify you in writing if you are required to pay your fees electronically.

Payments must be submitted by the due date to be considered timely. For an EFT payment to be timely, it must be initiated on or before the filing due date and funds must settle into CDTFA's bank account on or before the banking day following the due date. Some EFT payments made on the return's due date may need to be initiated before 3:00 p.m. (Pacific time) to be received timely. For more information regarding EFT payments, please see EFT FAQs.

The penalty for filing a late return and/or late fee payment is ten percent of the fee amount due for the period. Interest also applies to late fee payments.

You may log into your account to submit an online request for an extension to file a return or relief from penalty (including interest due to a disaster).

Login with your username and password to update your account information such as changes to your business ownership, email address, mailing address, location address, and phone or fax number. It is important to notify us so we can update our records to ensure you receive information and email reminders to electronically file timely. If you are unable to login to access your account you may use our form CDTFA-345-SP, Notice of Business Change Special Taxes and Fees Accounts, and mail it to the address provided.

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% of the tire fee collected as reimbursement for any costs associated with the collection of the fee.

Consumers, who purchase new tires through an Internet transaction from an out-of-state seller for delivery in California without paying the tire fee, shall pay the tire fee directly to the CDTFA.

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.).

Note: A new tire does not include retreaded, reused, or recycled tires.

Tires Not Subject to the Fee

• 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.

Examples of motorized equipment include riding lawnmowers, riding snow blowers, go carts, and golf carts. Tires for motorized equipment are only subject to the fee when sold separately from the equipment.

Also, sales of new tires that are sold to retail customers as replacement tires for trailers are subject to the tire fee.

Also, sales of new tires that are sold to retail customers as replacement tires for ATVs are subject to the tire fee.

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.

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.

The CDTFA's online registration system will guide you through the process. See our online guide, Use Tax Collection Requirements Based on Sales into CA 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. A copy of the invoice or similar document should be retained by both the seller and purchaser.

If the out-of-state seller does not have a tire fee account, the California purchaser must pay the tire fee directly to the CDTFA.

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 the CDTFA.

• Sales for resale.
• Sales to American Indians 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.