The Comptroller of Maryland announced on December 22, 2025, amendments to regulations governing the state’s tire recycling fee and the introduction of a new tire fee, with changes taking effect January 1, 2026.
These updates stem from provisions in the Budget Reconciliation and Financing Act of 2025 (BRFA), enacted during the Maryland General Assembly’s session and approved as Chapter 604. The act establishes the new fee and raises the existing recycling fee to support environmental cleanup and transportation funding.
Effective January 1, 2026, the tire recycling fee increases to $1.00 per tire from the previous $0.80. This fee applies to the first sale of a new tire in Maryland by a tire dealer. The state also implements a new $5.00 tire fee on the same sales. Both fees cover new tires sold individually or as part of a new or used vehicle, trailer, farm equipment, or similar machinery.
The fees do not apply to sales of new tires to out-of-state wholesalers or out-of-state retailers. A “first sale” is defined as any sale not to a wholesaler or out-of-state retailer.
Tire dealers must report and remit both the tire recycling fee and the new tire fee to the Comptroller on the same return. Revenue from the tire recycling fee, after administrative costs, goes to the Used Tire Cleanup and Recycling Fund, administered by the Maryland Department of the Environment. Revenue from the new tire fee, less administrative costs, is allocated to the Transportation Trust Fund.
The tire recycling fee, first imposed on February 1, 1992, and set at $0.80 since April 1, 2005, may be adjusted every two fiscal years based on the Consumer Price Index, but cannot exceed $2.00 per tire. The Department of the Environment now holds authority to set and adjust this fee, replacing the prior role of the Board of Public Works.
Sellers must separately state the fees on invoices where applicable, particularly for sales to resellers. Returns and payments are due by the 21st day of the month following the sale month, with electronic filing required through Maryland Tax Connect after certain dates. Dealers maintain records for four years, including details of sales and fees collected.
The proposed regulatory changes will publish in the Maryland Register on January 9, 2026, with public comments accepted through February 9, 2026. Comments can be emailed to CompMDLegal@MarylandTaxes.gov.
Technical Bulletin No. 61 from the Comptroller’s Office provides detailed guidance on these fees, including applicability, exemptions, recordkeeping, and filing requirements. Dealers can register for Maryland Tax Connect to handle electronic filing and payments.
For tire dealers in Southern Maryland, including those in Calvert, Charles, and St. Mary’s counties serving local auto shops, dealerships, and farm equipment businesses, these changes require prompt updates to pricing, invoicing systems, and tax reporting processes. The combined $6.00 per new tire (recycling fee plus new tire fee) will affect costs for consumers purchasing tires for vehicles, trailers, or machinery.
The BRFA’s tax adjustments aim to address fiscal needs while directing funds to specific environmental and infrastructure purposes. The tire recycling fee supports cleanup of stockpiled used tires, reducing environmental hazards, while the new fee bolsters transportation funding.
Tire dealers should review the full Technical Bulletin and consult the Comptroller’s resources to ensure compliance. Additional details on registration, filing, and fee application are available through official channels.
When is a fee not a tax? When the democrat run Maryland government constantly over spends, runs an annual deficit and then swears they won’t raise taxes.