The Tire Recycling Fee is levied on each new tire sold in Maryland. The fee applies to the first sale of a tire in Maryland. The tire recycling fee is imposed on those who sell tires rather than on those who purchase them. This excludes sales to tire wholesalers or to an out-of-state retailers. The fee is $.80 on each new tire.
By its nature, the fee being imposed on tire sellers and not purchasers, there are no exemptions for retail customers. The fee need not be passed on to a retail customer as a separate charge or tax. If you choose to show the fee as a separate charge to the retail customer, be sure to exclude it from the amount subject to the sales and use tax.
The tire recycling fee applies when:
- A retailer acquires tires from out of state, and the only sales which take place in Maryland are the sales to retail customers, the fee becomes payable when the retail sales are made.
- A retailer places an order in Maryland with an out of state travelling salesman
- tires are sold to nonprofit organizations of any description, federal, state and local governments, and diplomats;
- tires are sold at a reduced price pursuant to a guarantee;
- the tires are pneumatic tires intended for use on a motor vehicle or on any vehicle designed to be transported or towed by another motor vehicle; or,
- the tires are sold with trailers, farm equipment or similar machinery and new cars (including the spare tire, no matter what type or size).
- The tire is a spare or “doughnut”
The fee does NOT apply when:
- A retailer places an order at the out-of-state home office of a manufacturer or wholesaler. The fee will not apply until a subsequent sale is made.
- The tire is provided to the consumer at no charge as a replacement tire. (In this case, no actual sale takes place);
- The tire is a used tire or a retread tire; or,
- the tire is a bicycle tire.
Out of state businesses
Out-of-state businesses are still required to pay the fee for orders that were placed in Maryland whether the order was taken by a traveling salesman or a branch location. If the order is placed at the out-of-state home office, the fee will not apply until a subsequent sale is made.
Tire Recycling Fee Tax Tips and Legislation