Legislature Passes Sales Tax Exemption on Recycling, Composting Equipment

September 11, 2015

SACRAMENTO, CA – The California Legislature, in a bipartisan vote, approved legislation authored by Assemblymember Susan Eggman (D-Stockton) that would generate investments in jobs and a more efficient economy by creating a sales tax exemption on equipment used for recycling and composting. Assembly Member Eggman has worked on this issue since her first year in the legislature, and a previous attempt to enact this policy stalled during the prior legislative session. AB 199 now goes to the desk of Governor Jerry Brown.

“This legislation can help us make the most of the materials we too often discard or ship overseas,” said Assemblymember Eggman. “I’ve seen dozens of local companies turn trash into treasure by recycling discards into new products. This not only eliminates the need for extracting new raw materials, it helps create manufacturing jobs.”

“California’s commitment to recycling has diverted millions of tons of recyclables per year, cut greenhouse gases, and created 125,000 jobs over the past two decades,” said Nick Lapis, Legislative Coordinator for Californians Against Waste. “However, most of what we continue to send to landfills is readily recyclable or compostable. By collecting, processing and manufacturing these materials into new products in the state we can support a sustainable and prosperous California economy. Assemblymember Eggman understands that entrepreneurs, workers and local communities are critical in this effort, and we applaud her leadership.”

AB 199 would provide a sales-and-use tax exemption on recycling and composting equipment, as well as equipment that uses recycled content in the manufacturing of new products. According to CalRecycle, California exports 20 million tons of recyclables annually, worth nearly $8 billion. Keeping more of these valuable materials here would allow Californians to share in both the environmental and economic benefits of their recycling efforts.

According to CalRecycle, for every ton of materials that gets recycled instead of being disposed, California’s 5300 recycling establishments will pay an additional $101 in salaries, produce $275 more in goods and services, and generate $135 more in sales. Furthermore, CalRecycle estimates that meeting the state’s recycling goals with in-state infrastructure could generate an additional 110,000 jobs, on top of the existing 125,000 people employed in recycling.

As California strives to achieve its ambitious recycling goal (AB 341 Chesbro) of recycling 75 percent of the solid waste it generates by 2020, an estimated 22 million tons will have to be collected and diverted from the state’s waste stream. Additionally, next year’s implementation of AB 1826 (Chesbro) will require restaurants, grocery stores, apartments and other commercial generators of organic waste to contract to have to that waste composted or anaerobically digested, increasing the need for infrastructure to handle this new material.

Assemblymember Eggman has worked to create jobs with a sales-and-use tax exemption on recycling and composting equipment for nearly three years. She introduced similar legislation shortly after she was first elected in 2012, and although it did not pass, she remained focused on the issue and introduced AB 199 earlier this year.

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Lanh NguyenSeptember 11, 2015