On January 5, the Environmental Audit Committee (a sub-body of the UK Parliament) issued a report calling for a 25p ($0.34 USD) levy on prepared coffee sales where the customers receive a disposable cup. The funds from the levy would be earmarked to create additional recycling facilities and the “binfrastructure” necessary to support proper coffee cup recycling. The Committee believes that coffee cups require special treatment because the plastic lining inside the cup is particularly difficult to remove. If 100% recycling isn’t achieved by 2023, the Committee further recommends that disposable coffee cups be banned. Parliament has two months to respond to this recommendation.
This proposal is entirely consistent with the global trend of utilizing point-of-sale assessments to encourage/discourage consumer behavior and promote recycling. Many jurisdictions have recently moved to impose “bag fees” which are intended to discourage the use of disposable grocery bags. Across the United States and in Canada, point of sale fees are used as a means of supporting the recycling of bottles, tires, batteries, paint, lumber, mattresses, light bulbs, computer hardware, consumer electronics among dozens of other items.
Whether taxation should be used as a means of influencing consumer decisions is a point of significant debate, however what’s not up for debate is the challenge retailers’ face in properly assessing and reporting the correct fees across the many jurisdictions in which they operate.
About the Author
Charles Maniace is the Director of Regulatory Analysis at Sovos. An attorney by trade, Chuck leads a team of attorneys and tax professionals responsible for all the tax and regulatory content that keeps Sovos clients continually complaint. Over his 15 year career in tax and regulatory automation, he has given talks and presentations on a variety of topics including The Taxation of High Tech Transactions, The Taxation of Remote Commerce, The Regulatory Implications of Brexit, The Rise of E-Audits, Form 1042-S Best Practices and Penalty Abatement Practices for Information Returns. Chuck is a member of the Massachusetts Bar and holds a BS in Business Economics from Bentley College, a JD from Boston University School of Law, and an LL.M in Taxation from Boston University School of Law.More Content by Charles Maniace