California bottle fee to apply to wine and spirits in 2024

California bottle fee to apply to wine and spirits in 2024

Many aluminum, glass, and plastic containers are subject to a refundable bottle recycling fee in California, but many aren’t. Whether the bottle fee applies depends as much on what the bottle holds as what it’s made of. For example, the bottle fee currently applies to beer and wine coolers but not to wine or spirits. That will change effective January 1, 2024, when all types of wine and spirits containers will be subject to the bottle fee too.

Read on to learn more about the fee and how this policy change will impact direct wine shippers and other wine and spirits manufacturers and distributors, as well as consumers in the state. It’s important to understand the new requirements, for noncompliance can lead to the suspension or revocation of a direct shipper permit.

Why does California have a bottle recycling fee?

Bottle fees in California fund the state’s ambitious recycling program. The California Beverage Container Recycling and Litter Reduction Act tasks California with achieving an 80% recycling rate for aluminum, bimetal, glass, and plastic beverage containers.

Who pays the bottle fee?

Manufacturers and distributors of qualifying beverages currently pay the California bottle fee (i.e., make redemption payments). They’ll be joined by direct wine shippers and other wine and spirits producers and distributors come January 1, 2024.

What is a beverage manufacturer?
When it comes to responsibility for paying the fee, a beverage manufacturer is anyone who bottles, cans, or otherwise fills qualifying beverage containers or imports qualifying filled beverage containers for sale to distributors, dealers, or consumers in California.

What is a beverage distributor?
With respect to the fee, California considers a distributor to be any person who engages in the sale or import of qualifying beverages in qualifying containers to a dealer in the state. This includes any manufacturer who engages in such sales.

Starting January 1, 2024, manufacturers and distributors of wine and spirits — including direct shippers — will be liable for the bottle fee.

Does the bottle fee apply to direct shipments from out of state?

It does.

Per the statute, “with respect to the payment of redemption payments for beverages manufactured outside the state and sold directly to consumers within the state with a direct shipper permit, the distributor shall be deemed to be the person or entity named on the direct shipper permit … and shall be responsible for paying to the department the total redemption payment for all sales and transfers made directly to consumers” in California. 

How much is the bottle fee?

The redemption fee and California Refund Value (CRV) vary depending on the size of the container and the state’s recycling rate. The rates are generally as follows:

  • 5 cents for a container with a capacity of less than 24 fluid ounces
  • 10 cents for a container with a capacity of 24 fluid ounces or more (e.g., 750ml wine bottles)

However, if the state achieves an aggregate recycling rate for all qualifying beverage containers of 75% or more for the calendar year (just shy of the ultimate goal of an 80% recycling rate for all CRV beverage containers), the rates will drop to 4 cents (for a container less than 24 fluid ounces) and 8 cents (for a container 24 fluid ounces or more). The current rates can be found at CalRecycle.

Starting January 1, 2024, the redemption payment and CRV is 25 cents for a box, bladder, pouch, or similar container containing wine or distilled spirits.

What containers are eligible for the bottle fee?

A qualifying container is eligible only if it contains one of the following:

  • Beer and malt beverages
  • Wine coolers
  • Carbonated fruit drinks, soft drinks, or water
  • Noncarbonated fruit drinks, soft drinks, or water
  • Coffee and tea beverages
  • 100% fruit juice (less than 46 oz.)
  • Vegetable juice (16 oz. or less)
  • Wine and spirits (starting January 1, 2024)

What containers are not eligible for the bottle fee?

The redemption fee and CRV don’t apply to containers that hold the following products:

  • Infant formula
  • Medical food
  • 100% fruit juice (46 oz. or more)
  • 100% vegetable juice (more than 16 oz.)
  • Food and nonbeverage containers
  • Wine and spirits (through December 31, 2023)

CalRecycle provides additional details.

Labeling requirements

Eligible containers containing qualifying beverages must be labeled with one of the following:

  • California Redemption Value
  • CA Redemption Value
  • California Cash Refund
  • CA CRV
  • CA Cash Refund

Although wine and spirits manufacturers and distributors are liable for the redemption fee effective January 1, 2024, they have until July 1, 2025, to comply with labeling requirements (Sec. 20, Section 14561 (f)).

New requirements for wine direct shipper permittees

Direct wine shipper permittees will need to register with the California Department of Resources Recycling and Recovery (CalRecycle) as a beverage manufacturer and a distributor.

Once registered, direct-to-consumer (DTC) wine shippers will have to comply with all applicable requirements, including reporting and paying the redemption fees imposed on beverage manufacturers and distributors by the California Beverage Container Recycling and Litter Reduction Act.

The processing fees for wineries are 0.426 cents per glass bottles and 0.574 cents for other container types.

Penalties for noncompliance

California takes recycling seriously. Should a direct wine shipper permit holder fail to comply with certain provisions of the California Beverage Container Recycling and Litter Reduction Act (e.g., registering for and paying the redemption fee), it could have its wine direct shipper permit suspended or revoked by the Department of Alcoholic Beverage Control.

How does the bottle fee work?

The bottle fee works like so:

Beverage manufacturers and distributors make redemption payments on eligible bottles (as required) to CalRecycle, officially known as the Department of Resources Recycling and Recovery.

CalRecycle deposits the collections in the California Beverage Container Recycling Fund.

Consumers receive a California Refund Value (CRV) payment from the fund when they return eligible containers to a certified recycling center.

Since not every qualifying container is returned for its CRV, CalRecycle collects more revenue from distributors than it pays to consumers. Leftover revenue from unredeemed containers helps fund “other recycling-related activities,” such as administrative costs, hauling fee payments, and recycling grants to various entities.

States with bottle bills

California isn’t the only state with a bottle bill. According to the National Conference of State Legislatures (NCSL), 10 states and one territory had bottle bills as of March 2020:

  • California
  • Connecticut
  • Hawaii
  • Iowa
  • Maine
  • Massachusetts
  • Michigan
  • New York
  • Oregon
  • Vermont
  • Guam

Rates range from about two cents to 15 cents per bottle, depending on the container and what it holds.

Each state’s policy is different. For example, a fee applies to all beverages except dairy products and unprocessed cider in Maine, but only to beer, malt, carbonated soft drinks, and mineral water containers in Massachusetts. Iowa and Maine are the only states that currently include wine containers, but both provide an exemption for wine sold under a DTC permit. See the NCSL for more details.

Different states periodically consider new or expanded bottle bills. Thus, new bottle bills were introduced in Illinois, New Hampshire, Rhode Island, and Virginia in 2022, while New York and Vermont considered expanding existing programs. None of the bills made it into law.

Want to learn more about beverage alcohol tax compliance? Connect with us.

Recent posts
Avalara Tax Changes 2023: Key issues facing businesses today
An introduction to property taxes
Will South Dakota exempt food and drink?

Small business FAQ

Get simple answers to complicated tax compliance questions.

Read the FAQ  

Stay up to date

Sign up for our free newsletter and stay up to date with the latest tax news.