(HSC sections 25205.6 & 25205.6.1; 22 CCR section 66269.1.)

The Environmental Fee is an annual fee paid by California businesses and organizations that use, generate, store, or conduct activities related to, hazardous materials. “Hazardous material” is defined in Health and Safety Code (HSC) section 25501 and in Title 22 of the California Code of Regulations (CCR) section 66269.1(a)(3). The amount of the Environmental Fee is based on the number of employees employed in California by an organization.

DTSC provides CDTFA with a schedule of codes from either the Standard Industrial Classification system established by the U.S. Department of Commerce, or the North American Industry Classification System (NAICS) adopted by the U.S. Census Bureau, on or before October 1 of each year. This schedule consists of the classes of organizations that use, generate, store, or conduct activities in the state related to, hazardous materials. Most organizations with the qualifying number of employees are subject to the Environmental Fee, with some exemptions identified below. CDTFA assesses and collects this fee on behalf of DTSC from organizations using the codes provided by DTSC. Organizations subject to the fee are required to report annually on an Environmental Fee Return provided by CDTFA.

The rates specified in Table 1 are for FY 2024/25 are set under HSC sections 25205.6 and 25205.6.1. The fees will be collected on the last day of February 2025 for the fiscal year in which it is assessed.  

The Board of Environmental Safety (BES) may adjust the rates no more frequently than once a year and no later than October 1. Beginning with FY 2024/25, FES shall adjust the fee rate limits annually to reflect changes in the Consumer Price Index (CPI) issued by the Department of Industrial Relations (DIR).

Counting Employees in Calculating the Fee

(HSC section 25205.6(e))

The number of employees employed by an organization is the number of persons employed in California for more than 500 hours during the calendar year preceding the calendar year for which the fee is due. The FY 2024/25 Environmental fee is due the last day of February 2025, so the calculation of the number employees will be based on employees in the Calendar Year (CY) 2024.

The Environmental Fee does not apply to a nonprofit corporations primarily engaged in the provision of residential social and personal care for children, the aged, and special categories of persons with some limits on their ability for self-care, as described in Standard Industrial Classification (SIC) Code 8361 of the SIC Manual published by the United States Office of Management and Budget, 1987 edition or as described in Codes 623220, 623312, and 623990 of the NAIC published by the United States Office of Management and Budget, 2017 edition. (HSC section 25205.6(g).)

The following businesses are excluded or exempt from the Environmental Fee:

• Private households. (22 CCR § 66269.(d)) (SIC code 88 and NAICS code 814.)
• Nonprofit residential care facilities (SIC code 8361 or NAICS codes 623220, 623312, and 623990). (HSC § 25205.6(g).)
• Insurance companies that pay tax on gross premiums in lieu of all other California taxes and licenses. CDTFA’s Publication 90, June 2023.
• Banks that pay a tax on net income in lieu of all other California taxes and licenses. CDTFA’s Publication 90, June 2023.
• U.S. government agencies and instrumentalities. CDTFA’s Publication 90, June 2023.
• Nonprofit credit unions as defined in Financial Code section 14002 (NAICS code 521). CDTFA’s Publication 90, June 2023.
• Businesses with less than 100 qualifying employees. (HSC § 25205.6.1(c)(1)(A).)