These three examples show how taxes apply to solid waste, recycling or salvage collection and haul away.
- ABC Recyclers picks up bins of recyclable paper, newspapers, and glass from residential and business customers. Due to market conditions, ABC Recyclers hauls the glass and recyclable paper/newspapers directly to the solid waste transfer station, rather than recycling the materials. Even though the materials are commonly recycled, because ABC Recyclers did not recycle these materials, but instead delivers them for disposal, the materials are considered “solid waste.” ABC Recyclers must charge and collect the solid waste collection tax from its customers. ABC Recycler is also subject to the B&O tax under the Service and Other Activities classification. Both taxes are reported on the Department of Revenue excise tax return.
- ABC Recyclers picks up scrap metal and hauls the scrap metal to its recycling facility where it sorts the scrap metal and sells the scrap metal to XYZ Wholesaler. ABC is taxable as follows:
- Pay B&O tax under the Service and Other Activities classification on income received from collecting and hauling scrap metal to its recycling facility.
- Pay B&O tax under the Wholesaling classification on income received from sales of the scrap metal to XYZ if ABC receives a reseller permit from XYZ. If ABC does not receive a reseller permit, ABC must pay B&O tax under the Retailing classification and collect and remit retail sales tax on the sales to XYZ.
- WOW, Inc. collects solid waste and recyclable yard materials from residential customers. The solid waste is hauled directly to a transfer station, but the yard waste is hauled to a third-party facility where it is manufactured into compost. WOW is taxable as follows:
- Collect and remit the solid waste collection tax from its customers on the charges for collecting the solid waste. Any charges for picking-up and hauling the recyclable yard materials are not subject to the solid waste collection tax.
- Pay B&O tax under the Service and Other Activities classification on income received from collecting and hauling solid waste to the transfer station.
- Pay PUT under either the Motor Transportation or Urban Transportation classifications on income received from hauling the recyclable yard materials to the third-party compost facility.