What is a tire pre-disposal fee, and can the fee be passed on to the customer?
In accordance with Tenn. Code Ann. 67-4-1601, persons making retail sales of new tires for use on motor vehicles must pay a $1.35 pre-disposal fee for each new tire sold. This fee can either be paid by the retailer or passed on to the customer. If the fee is passed on to the customer, it is considered to be part of the sale price of the tires. Retailers must collect sales tax on the total sale price of all taxable items. Therefore, if the pre-disposal fee is passed on to the customer then sales tax would be due on the entire purchase price of the tires including the $1.35 per tire fee.
