New York Waste Tire Fee: What Out-of-State Auto Dealers Need to Know

Auto dealers that sell to New York residents should understand how the state’s waste tire management and recycling fee may apply beyond state lines. Here’s what out-of-state dealers need to know to stay compliant and avoid unexpected filing obligations.

Who Must Collect the New York Waste Tire Fee?

If you are an out-of-state tire service, as defined by New York state law, you may be responsible for collecting and remitting the New York waste tire management and recycling fee if you sell vehicles to New York residents. This means that even if an auto dealer is not physically located in New York, if it sells a vehicle to a New York resident, the auto dealer is responsible for collecting and remitting the New York waste tire management and recycling fee. The key factor is that if the vehicle is being registered in New York, it is subject to New York sales tax and is therefore subject to the fee.

A tire service for purposes of this fee is an online tire retailer, automobile dealership or auto repair shop. The tire service is responsible for collecting the $2.50 fee per tire on most new tires sold at retail in New York State. If a tire service sells or leases new or used vehicles in New York State or to New York State residents, the fee applies to any new tires included in the sales or long-term lease, including spare tires. To recover administrative costs, a tire service that maintains any physical retail location in New York State may keep 25 cents per tire from any fees collected from all sales of new tires.

Which Tires and Transactions Are Subject to the Fee?

The fee applies to new tires sold at retail for use on cars, trucks, motor homes, buses, trailers, motorcycles and all-terrain vehicles. There are exemptions for sales to certain government entities or resellers.

How Do Auto Dealers Report and Remit the Waste Tire Fee?

A tire service that is required to collect sales tax must report and remit any waste tire management and recycling fees collected with its New York sales tax return.

The waste tire management and recycling fee is currently authorized through Dec. 31, 2027.

As of Sept. 1, 2025, the obligation to collect the fee was expanded to include mail-order, phone-order and internet retail sales of new tires delivered within New York State, and a tire service that installs tires it did not sell must collect the $2.50 fee on each new tire it installs unless the purchaser can show the fee was previously paid to the seller.

If your dealership sells or leases vehicles to New York residents, reviewing your sales tax and fee collection process now can help support compliance and reduce potential exposure. Withum’s State and Local Tax Services Team can help assess your obligations and identify practical next steps.