Music City Labs

Packtally guide

California's SB 54 small producer exemption: who qualifies and how to claim it

Brands with under $1 million in California sales can be exempt from most SB 54 packaging reporting and fees, but only after applying. Who qualifies and how to apply.

By Blake Smith, founder of Music City Labs. Updated .

Short answer: If your brand had less than $1 million in gross sales in California in the most recent calendar year, you can apply to be exempt from most of SB 54's reporting and fee requirements. It isn't automatic: you register in CalRecycle's reporting system, submit the small producer exemption application with proof of your California sales, and keep it updated before it expires.

Who qualifies

  • Producers with gross sales in California under $1 million in the most recent calendar year.
  • "Sales in California" means sales into the state, including online orders shipped to California addresses, not just sales by a California business.
  • The exemption covers most reporting and fees. It doesn't cover everything: California's separate requirement that packaging be recyclable or compostable by 2032 still applies.

How to apply

  1. Work out your California sales. Filter a year of Shopify orders by shipping state California and total them. Add California sales from other channels, such as Amazon or wholesale, if you have them.
  2. Register as a producer in CalRecycle's packaging EPR reporting system, known as PEPRS.
  3. Fill out the small producer exemption application and attach records showing your California gross sales for the most recent calendar year.
  4. Save the approval and its expiry date. To keep the exemption, you update the information from your application before it expires.

Common mistakes

  • Assuming small means exempt. Until your application is approved, you aren't exempt in California.
  • Using total revenue instead of California sales. California's line is sales into California, which is often a fraction of total revenue.
  • Forgetting to renew. Put the expiry date on your calendar with time to spare.
  • Growing past the line without noticing. Check your California sales each year; crossing $1 million means full reporting.

Our reading of CalRecycle's published guidance as of October 2026, for orientation only and not legal advice.

Sources