California Law: VARs To Charge Recycling Fee

The Electronic Waste Recycling Act of 2003 requires retailers to collect a $6 fee from their customers for each CRT or LCD sold that is smaller than 15 inches and an $8 fee for displays 15 inches to 35 inches. The recycling fee for displays larger than 35 inches is $10. The fees will help offset the state's costs to recycle discarded displays.

"It's a pain," said Chris Ferry, executive vice president of Technology Integration Group, a San Diego solution provider. "We've got a whole new line item that we have to put on every sale of every monitor, laptop or LCD we sell in the state. It applies to retailers, mail-order companies and manufacturers selling direct. I don't see any loopholes."

The recycling act was first passed in 2003, but the Electronic Waste Recycling Fee provision of the act doesn't go into effect until Jan. 1, 2005.

According to the California State Board of Equalization, the fee applies to monitors that are leased or sold. "The general rule under California's Revenue and Taxation Law has long been that a lease is a continuing sale and purchase," according to the state's Web site.

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Solution providers, retailers and vendors that sell monitors to end users collect the fees from consumers, then remit the money to the Board of Equalization. Solution providers and other resellers, however, can retain 3 percent of the fees collected as reimbursement for costs incurred while collecting the fees, the Web site stated.

Some California solution providers were not aware of the new law until they were informed by CRN. "You've just ruined my day," said Varoujan Baltayan, senior account executive at CorpInfo Services, a solution provider in Los Angeles. "The cheapest solution to this is to not sell the monitor with the system."

He added that the 3 percent fee reimbursement was no consolation. "It will take 300 percent of the fee to administer the program," Baltayan said.

Ferry said customers will ultimately pay the price for California's recycling law. "We are all going to have to pass this [cost] through some way or another," he said.