Survey Finds Proposed California 'Tech Tax' Likely to Discourage Consumers, Adversely Affect California Economy

6/19/2002

From: Kerry Fennelly of the Electronic Industries Alliance, 703-907-7792

ARLINGTON, Va., June 19 -- A recent online poll on recycling conducted for the Electronic Industries Alliance (EIA) by eBrain Market Research suggests that legislation currently pending in the California Assembly would discourage consumers from buying electronic products and adversely affect California's economy.

eBrain Market Research conducted a national online poll to gauge consumer behavior regarding electronics recycling. The results provide a good snapshot of the possible effect pending California electronics recycling legislation would have on California consumers' behavior.

While 34 percent of the households polled said that an advanced recycling fee of $5 would decrease their likelihood of buying, this number rose to 53 percent at $10 and to 74 percent at $20. Two bills pending in the California Assembly, SB 1619 and SB 1523, propose an advanced recovery fee of up to $30 on all sales of Cathode Ray Tube computer monitors and televisions to fund recycling efforts.

The survey also found that 58 percent of households would probably buy electronics products online -- even with shipping and handling costs -- to avoid paying a recycling fee at a retail store. Under the pending legislation, only those products sold at retail outlets or by companies with a brick and mortar presence in California would be subject to the new fee, meaning more consumers would likely be steered towards purchasing items online, where they would not be subject to the fee or California sales tax.

As a result, these bills would have the unintended impact of reducing California's revenue. In 2001, sales tax revenue accounted for 27 percent of California's total tax revenue. Currently, $1.75 billion of state sales tax revenue is lost to e-commerce activity in California.

"EIA strongly encourages responsible recycling of electronics products as the best option at the end of life," said Heather Bowman, director of EIA Environmental Policy. "But we need to ensure that any solution addresses the needs of the consumer. They play a vital role in successful electronics recycling. Instead of imposing a 'tech tax' on California consumers, we need to direct our efforts at developing a voluntary, cost-effective and consumer-friendly system that results in increased, environmentally sound recycling. We don't believe the California bills further these goals."

Additional information from the survey follows:

Eighty-four percent of households said they regularly recycle something, including plastic, paper, glass or aluminum. The survey found that an overwhelming majority of consumers - 87 percent - believe it is important to recycle products after use, and 78 percent consider recycling of consumer electronics important.

However, 59 percent of those surveyed said they believe recycling programs should be voluntary rather than required by law.

About 50 percent of households said their preferred method of electronics' recycling would be a curbside collection, while 28 percent would rather take their used products to a designated recycling center.

eBrain Market Research's data was taken from a poll administered to a representative sample of online U.S. households between May 28 and June 3. Margin of error for aggregate results is plus or minus 3.1 percent.

The Electronic Industries Alliance (EIA) is a national trade organization that includes the full spectrum of U.S. manufacturers, representing more than 80 percent of the $550 billion electronics industry. The Alliance is a partnership of electronic and high tech associations and companies whose mission is promoting the market development and competitiveness of the U.S. high tech industry through domestic and international policy efforts. EIA, headquartered in Arlington, Va., comprises more than 2,300 member companies whose products and services range from the smallest electronic components to the most complex systems used by defense, space and industry, including the full range of consumer electronic products. The industry provides more than 2 million jobs for American workers.