Retail Beverage Container License and Recycling Fee: FAQS
|General Questions||Recycling Fee||Delaware
- Q. What types of beverage containers are included?
According to the law, "beverage container" means any airtight, non-aluminous container containing less than two (2) quarts of a beverage under pressure of carbonation. This describes the beverage containers subject to the fee and requirements discussed here. The definition is the same as it was for deposit containers.
- Q. How do I obtain a Retail Beverage Container License?
Register online at our One Stop site, download and remit a business license application, or call 302-577-8778. There is no fee to obtain this license.
- Q. How much does a Retail Beverage Container License cost?
There is no fee to obtain this license.
- Q. I've registered but need Beverage Container Recycling Fee coupons. How do I obtain the coupons?
Beverage Container Recycling Fee coupons will be mailed to you once you register as a Beverage Container Retailer. You may also file online or download our online Beverage Container Recycling Fee Coupon.
- Q. Can I separately list the Beverage Container Recycling Fee on my customer's invoice?
Yes. Title 30 Del§2912(b) states, "... Each retailer of beverages in beverage containers may list, as a separate line item on an invoice, the amount of the fees due under this subsection."
- Q. If we add $0.04 fee to our gross receipts, it makes our income go up even though we do not make the $0.04. Hence, taxes and workers compensation can also increase, which can hurt small businesses. Are there any provisions to not have the fee included in total gross receipts?
No. Title 30, Section 2120 states that no deduction for state taxes shall be made in the calculation of the gross receipts subject to tax. Therefore, the fee must be included in reportable gross receipts. However, for income tax purposes the collection and payment of the fee net against each other as income and a corresponding deduction. For Gross Receipts tax purposes, the first $960,000 of gross receipts each year are exempted and, therefore, small businesses should not be impacted by the total fees they collect and report.
- Q. If I have bottles after November 30, 2010 that have a $.05 Bottle Deposit label, can I sell that container after November 30, 2010?
Yes. You do not need to remove those bottles because under the new law there is no requirement for the $.04 Recycling Fee to be on the bottle label, and no legal requirement to remove the old label. However, if a bottle is sold after November 30, 2010 with a $.05 Bottle Deposit label, and the customer returns that bottle prior to February 1, 2011, the retailer must pay the customer the $.05 bottle deposit.
The State is creating $.04 Recycling Fee stickers that can be adhered to cases and six-pack carries after November 30, 2010, to help distinguish between bottles with a $.05 Bottle Deposit label that are refundable and those that are not.
- Q. If I have bottles before December 1, 2010 that don't have a $.05 Bottle Deposit label similar to the current bottle deposit label, can I sell that container?
No. Delaware Law requires that all bottle containers that are returnable for the $.05 bottle deposit to be clearly labeled. If not labeled, they cannot be sold prior to December 1, 2010.
- Q. How will the revenue generated by this fee be tracked? Will reports show how the money is being spent? Will this information be available to the public?
The Division of Revenue will be able to readily report the revenue collected. DNREC will be responsible for reporting annual expenditures from the Fund.
- Q. Who should I contact about receipt and fee collection questions?
The Delaware Division of Revenue at 302-577-8778.
- Q. If I only sell a few beverage containers a month, what process do I go through to include these sales in my gross receipts?
The sales of the beverage containers will be reportable as retail sales, and this is no change from the past. In addition, the retailer will have to file the 'Beverage Container Recycling' coupon and pay $0.04 for each beverage container sold.
- Q. How will beverage container retail sales be tracked? What will happen if I do not collect the fee? Will enforcement action be taken?
Beverage container retail sales will be tracked through periodic audits of wholesalers. These audits will match retail customer sales records to the retailers' filed beverage container recycling fee coupons. If the retailer has not collected the fee, the State will assess the business the fee on previous beverage container sales, and the business will be solely responsible for paying the fee.
- Q. What do I need to do when the Recycling Fee sunsets on December 1, 2014?
You will not need to do anything when the Recycling Fee expires. The Retail Beverage Container License will not be reissued for calendar year 2015.
- Q. Does the $0.04 retail beverage container recycling fee apply to the sale of beverage containers to the State of Delaware, the Federal Government and their instrumentalities, and political subdivisions?
No. Section 2901(11)(a)(1) of Title 30 of the Delaware Code states " ...sales to the United States or any agency or instrumentality thereof, or sales to this State, or any agency or political subdivision thereof, shall be deemed to be sales at wholesale." The beverage container recycling fee does not apply to wholesale transactions.
- Q. What qualifies my business or transaction as a "wholesale" transaction and exempt from collection the $0.04 fee?
In general, if the transaction is a business selling to another business for purposes of resale by the business buying the product, the selling business is defined as a wholesaler and the transaction is a wholesale transaction. For a more detailed definition of who is a wholesaler, see Section 2901(11)(a) of Title 30 of the Delaware Code. However, a number of retail businesses transact business with other businesses and record the transactions as retail sales. Only those transactions where the business has a wholesale license and properly reports beverage container sales as wholesale sales to the Delaware Division of Revenue will be exempt from the $0.04 fee, unless otherwise exempt as described below.
- Q. Are gross receipts from sales to charitable organizations exempt?
Normally, such gross receipts are subject to the tax, and the retail sales of beverage containers to such organizations are subject to the recycling fee. See also the answer above concerning wholesale sales.
- Q. 'On-premises sales' are exempt from the recycling fee. What defines an 'on premise sale'?
'On-premises sales' means sales transactions in which beverages are purchased by a consumer for immediate consumption within the area under the control of the dealer. Examples of 'on-premise sales' are sales in restaurants, bars, taverns, deli's, etc. where the beverage is consumed on the premises.
- Q. Are government agencies (federal, state, and local) exempt from the fee?
The beverage container recycling fee is assessed against the retailer on the sales of retail beverage containers and not the purchaser. However, by statute, sales to government agencies and businesses that are required to obtain a Delaware business license are deemed to be wholesale sales, and wholesale sales are not subject to the assessment of the beverage container recycling fee. In addition, sales of beverage containers by non-profit organizations exempt from federal income tax under §501(c) of the Internal Revenue Code of 1986 (26 U.S.C. §501(c)) as amended, are exempt from the Beverage Container Recycling Fee. Ultimately, the business is responsible for having the appropriate license and properly reporting the sale as either wholesale or retail. Accordingly, all retail sales of beverage containers that are subject to the $0.04 recycling fee must be collected and filed.
BEVERAGE CONTAINER RECYCLING FEE QUESTIONS
- Q. What is the "fund" being used for?
The Delaware Recycling Fund has been established for the exclusive purpose of funding specific activities designed to enhance the state's recycling rate and the diversion of recyclables that would otherwise be land disposed.
DELAWARE RECYCLING FUND QUESTIONS
- Q. Why were businesses not notified earlier about this?
Both DNREC and the Division of Revenue have been working to identify businesses that sell beverage containers at retail. Businesses have been notified of the licensing and fee collection requirements through a press release and postcard mailing.
- Q. Who do I contact to voice my opinion about this fee?
You can call the Division of Revenue's Gross Receipts Department at 577-8780 or DNREC's Solid & Hazardous Waste Management Branch at (302) 739-9403.