Is Your Winery Exempt from California EPR?
Oct 3, 2026 | 4 min read
Is Your Winery Exempt? SB 54 Small Producer Exemption
Written by Jeanette Tan | Photo by Shutterstock.com
“This must be for the big guys”
A lot of small winery owners hear about California’s new packaging rules and reach the same conclusion. We’re a small, family winery. We don’t make packaging. We already pay CRV. And I only just heard about this.
It’s a reasonable reaction. And here’s the good news: winery size does matter in California’s EPR Program, because there’s a Small Producer Exemption, and many wineries will qualify for it.
The catch is that the California regulations decide what “small” means, not you. And qualifying isn’t the same as being exempt. You have to apply, and you have to be approved.
The short answer: Your winery may be exempt from California’s EPR Program if your gross sales in California were less than $1 million last calendar year. But the exemption isn’t automatic. You have to apply to CalRecycle and be approved. If you missed the June 1, 2026 deadline, apply now.
In this post, you’ll learn:
• Whether the EPR Program applies to your winery in the first place
• How California measures a “small producer”
• What counts toward the $1 million sales threshold, and what doesn’t
• How to prove your California sales
• What to do next, whether you qualify or not
If you’re brand new to the EPR Program, start with our overview, EPR for Wineries: Start Here . It covers the whole program and gives you an 8-step roadmap.
This post goes deep on the first two steps: confirming you’re a producer and applying for the exemption.
Does California’s EPR Program apply to my winery?
The biggest risk with the EPR Program is getting blindsided by rules that seem to come out of nowhere. And if you’ve started reading about it, you’ve probably found yourself buried in acronyms, definitions, and pages of regulations.
You don’t need to understand every regulation before you act.
You just need to know where your winery sits in the program, so you know what to do next.
Think of it like reading a map. You don’t memorize every road in California before you start driving. You just need to know where you are, where you’re going, and what your next turn is.
For the EPR Program, “where you are” comes down to two questions:
Does your winery sell products in packaging the EPR Program applies to?
Is your winery the business responsible for that packaging?
Once you know where you are, the path is simple:
Figure out whether the EPR Program applies to you.
If it does, figure out whether you qualify for the Small Producer Exemption.
Then either apply for the exemption, or start on the standard compliance steps.
What does EPR mean in plain English?
EPR stands for Extended Producer Responsibility. The regulations make it sound complicated, but the idea is simple: California is changing who pays for packaging waste.
Think of it like a trash bill changing hands. For years, local governments, taxpayers, and consumers have carried most of the cost of collecting and recycling packaging. The EPR Program shifts more of that bill to the businesses that put the packaging into the market.
In California, the law behind this is SB 54. CalRecycle runs the program, and the Circular Action Alliance (the CAA) is the organization that collects the reports and fees from producers.
Am I the “producer”?
“Producer” is one of the most confusing words in the EPR Program, because it sounds obvious. You produce wine, not packaging, right?
Under the EPR Program, “producer” is a legal term. It does not refer to the company that manufactured the bottle or the box. It refers to the business legally responsible for the packaged product being sold into the market.
For most wineries, the producer is the brand owner.
Think of a sports jersey. The team didn’t sew it. An apparel company did. But the team’s name and logo are on the front, and the team is the brand fans are buying. If that jersey were sold under an EPR Program, the team would be responsible for the jersey’s packaging, not the company that sewed it.
The EPR Program works the same way. If your winery’s name is on the label and you sell that wine in California, you’re the producer, even though you bought every piece of packaging from a supplier.
A few arrangements can complicate this, like custom crush, private labels, and licensed brands. If one of those applies to you, take a closer look at who owns the brand.
The key question isn’t “who made the packaging?” It’s “whose brand is on the packaged product?”
“But my bottles are already covered by CRV”
If you already pay CRV on your wine bottles, it’s natural to ask why there’d be a second packaging program.
The answer: CRV and the EPR Program are separate programs with separate rules. Think about the DMV. Your driver’s license and your vehicle registration are both about driving, but they’re separate requirements. Having one doesn’t take care of the other.
In California’s EPR Program, your glass wine bottle is excluded because it’s already part of CRV. That exclusion is California’s alone. Other states’ EPR Programs include the glass bottle.
But the bottle isn’t the only packaging that leaves your winery. You still need to look at things like:
• Capsules
• Boxes and dividers
• Shipping boxes and protective inserts
• Tape and shrink wrap
• Gift boxes and wine club inserts
An excluded bottle doesn’t mean an exempt winery.
Most wineries still have packaging that counts as covered material in California. That’s why the Small Producer Exemption matters.
What is the Small Producer Exemption?
The phrase “Small Producer Exemption” sounds reassuring. But the question isn’t “Am I a small winery?” It’s “Do I meet California’s test?”
“Small” is subjective. You may think of your winery as small because you are still working your day job, have a handful of employees, and make a few thousand cases. California doesn’t measure any of those things.
California’s test: less than $1 million in gross sales in California in the most recent calendar year.
Two words in that sentence matter most:
• Gross means total sales, not profit.
• California means sales made in California, not necessarily all your sales everywhere.
Here’s how that plays out:
• Winery A had $800,000 in total sales, all in California. It’s under the threshold.
• Winery B had $2 million in total sales, but only $700,000 were California sales. It’s also under the threshold, as long as it can show how it got to $700,000.
What doesn’t count as California sales
Start with your total gross sales, then take out:
• Wine shipped to customers outside California (wine club, eCommerce, and other direct-to-consumer shipments)
• Sales to distributors outside California
Everything else stays in. That includes a few items that surprise people:
• Sales to California distributors count, even though the distributor resells the wine.
• CRV you collected counts.
• Shipping charges count, all of them. Shipping is a service you provide in California, so it’s California revenue even when the wine ships out of state.
A note on taxes: Excise tax and sales tax aren’t sales, so they shouldn’t be in your gross sales to begin with. But if they ended up in sales on your tax return, your California sales number includes them. Use the number as filed, and fix your books going forward.
If your winery is outside California, count only the sales you shipped into California, to DTC customers and to distributors.
If you own more than one brand and they’re all on the same tax return, add them together.
How do I prove my California sales?
If your total sales are under $1 million, this part is easy. Your tax return shows it. You are done.
If your total sales are over $1 million, you’ll need to show how much of that was California sales. Think of it as leaving a breadcrumb trail. Someone should be able to start at your total sales, follow your records, and land on the same California number you did.
The application asks for your total gross California sales “as found on the most recent calendar year’s tax returns.” So your tax return is the first breadcrumb.
Find the reports that separate California from everywhere else
• Tasting room, wine club, and eCommerce: Use the sales reports from your POS or eCommerce system. They list the “ship to” state for every order.
• Wholesale and distribution: Use QuickBooks. Your customer list shows which distributors and accounts are in California and which aren’t.
These reports are more breadcrumbs.
A caution about your CDTFA sales tax return
Your CDTFA-401 sales tax return is one of the documents CalRecycle accepts. But it only works if it clearly identifies your California sales.
• If you reported out-of-state distribution sales as out-of-state sales, your return can support your number.
• If you reported them as sales for resale, your return lumps them in with California distributors and wholesalers. It won’t show your true California sales, so you’ll need other records.
What CalRecycle accepts as proof
CalRecycle accepts several kinds of proof. These are the ones that fit a small winery:
• Any federal (IRS) or California (Franchise Tax Board) tax filing for the most recent calendar year
• Your CDTFA-401 return (see the caution above)
• Audited financial statements, if you don’t have a recent tax return
• A sales report or ledger report showing sales attributed to California
• A signed attestation or CPA letter certifying your California-only gross sales
The goal isn’t to bury CalRecycle in paperwork. It’s to make your math easy to follow: total sales, minus what wasn’t California, equals your California number.
I’m under $1 million. Now what?
This is the easiest place to make a costly assumption: “I’m under the threshold, so I’m exempt, so I don’t need to do anything.”
Think about college admissions. You might meet every requirement: the GPA, the test scores, the classes. But you aren’t a student until you apply and the school accepts you.
The Small Producer Exemption works the same way. Being under $1 million means you may qualify.
Receiving an approved exemption from CalRecycle is what actually exempts you.
Until then, California treats you like any other producer and is expecting to see your filings.
How to apply
Create a CalRecycle WebPass account.
Register as a producer in PEPRS, CalRecycle’s online reporting system.
Submit the Small Producer Exemption application with your supporting documents.
Wait for CalRecycle’s approval.
What the application asks for
• Your California corporation or LLC number
• A contact person
• Your total gross California sales for the most recent calendar year, with proof (see the list above)
• Your business type (retail, wholesale, or other) and whether you sell online, in person, or both
• The kinds of products you sell in California
• How much you buy from out-of-state suppliers
• How much you own the brands or trademarks on the products you sell
Good news: the application doesn’t ask for any packaging data. You don’t need to weigh a single box to apply.
How long the exemption lasts
An approved exemption is good for 2 years, or until your California sales go over $1 million, whichever comes first.
It isn’t permanent, so put the renewal on your calendar.
What still applies, even when you’re exempt
The exemption covers most of the EPR Program’s reporting and fees, but not everything:
• Keep your registration current and re-apply on time.
• Plan for 2032. Starting January 1, 2032, all covered material sold in California must be recyclable or compostable. That applies to exempt wineries too, so it’s worth asking your suppliers about it now.
Missed the June 1, 2026 deadline? Act now.
The deadline to register, and to apply for the Small Producer Exemption, was June 1, 2026. Many small wineries missed it, often because they didn’t hear about the EPR Program until after it passed.
This deadline applies to every winery, whether you qualify for the exemption or not. If you haven’t done one of these yet, do it as soon as you can:
• Apply for the Small Producer Exemption
or
• Register with the CAA
Here’s what we know so far:
• At least one winery that registered with the CAA has received a notice about the missing reports. It wasn’t threatening, but it’s a sign that the clock is ticking.
• We don’t yet know whether wineries that haven’t registered at all will be contacted.
• Wineries are easy for the state to find. Every winery is already registered with the ABC and with CalRecycle for CRV. Not every industry is that visible.
• Penalties could be assessed for not registering and for not filing.
So don’t count on staying under the radar. Getting registered, or getting your exemption application in, puts you back on solid ground.
What if I don’t qualify?
If your California sales are $1 million or more, the question changes. It’s no longer “Can I opt out?” It’s “What do I need to organize so I can comply?”
Think of it like a fork in the road. One path is the Small Producer Exemption. The other is the standard compliance path. Taking the second road doesn’t mean you’re lost. It just means you follow a different set of signs.
The same is true if you were initially exempt and your California sales grow past $1 million. Congratulations, but the first year you go over $1 million, you will need to register with the CAA and start filing.
On the compliance path, your next steps are:
Confirm you’re the producer for the products you sell in California.
Register with the CAA.
Identify your packaging. For each SKU, list every packaging component, what it’s made of, and how much it weighs.
Organize your sales by SKU and by state, so you can report what you sold into California.
You don’t have to master every requirement overnight. Steps 3 through 8 of the roadmap in EPR for Wineries: Start Here will walk you through it in order. And our free vendor email templates make it easier to get packaging details from your suppliers.
What about other states?
California may be the reason you started paying attention to the EPR Program. But if you sell wine into other states, it may not be the only EPR Program you need to think about.
Think of driving across state lines. You’re in the same car, but once you cross the border, the speed limits and signs change.
EPR Programs work the same way:
• A California exemption doesn’t carry over. Each state has its own rules and its own thresholds.
• The glass bottle is included in other states. California’s bottle exclusion is unique to California.
• More states are coming. As of 2026, California, Colorado, Maine, Maryland, Minnesota, Oregon, and Washington have EPR Programs for packaging, and others are developing them.
If you ship to customers or sell through distributors in other EPR states, look at each one separately. We’ll cover other states later in this series.
Frequently asked questions
Is the Small Producer Exemption automatic?
No. You have to apply through CalRecycle and receive an approved exemption. Until then, California treats you like any other producer.
Does CRV count toward the $1 million?
Yes. CRV you collect counts as California sales. Excise tax and sales tax don’t, unless they’re included in sales on your tax return.
Do sales to my California distributors count?
Yes. Sales to California distributors count, even though the distributor resells the wine. Sales to distributors outside California don’t.
How long does the exemption last?
Two years, or until your California sales go over $1 million, whichever comes first. Then you re-apply or register with the CAA.
I missed the June 1, 2026 deadline. Is it too late?
No. Apply for the exemption, or register with the CAA, as soon as you can.
The 30-second recap
You don’t need to memorize every acronym or regulation today. You just need to know where your winery fits. Answer these three questions:
Are you the producer? Is your winery’s brand on packaged products sold in California?
Were your California gross sales under $1 million last calendar year? And can you show how you got that number?
Do you have an approved exemption from CalRecycle? If not, have you applied?
If you answered yes to the first two and no to the third, your next step is clear: apply.
Where to go next
• Stay in the loop. Join our EPR updates list for winery-specific news as the EPR Program develops.
• Ready to start your packaging list? Download our free vendor email templates. They make it easy to ask your suppliers for the weight, material, and plastic content you’ll need.
• New to the EPR Program? Read EPR for Wineries: Start Here for the full overview and roadmap.
Coming next: What Counts as Packaging
Whether you’re exempt or not, you’ll eventually need to know what your packaging is made of. In the next post, we’ll walk through what counts as packaging for a winery, from the capsule to the shipping box, and share our free vendor email templates.
About the author: Jeanette Tan is the founder of QB Winery Solutions. She has worked exclusively with small wineries for over 15 years and has taught at Sonoma State’s Wine Business Institute.
Disclaimer: QB Winery Solutions is not a law firm or regulatory compliance company. This information is intended to be educational and is not legal advice. EPR rules and deadlines are still changing; this post reflects what we know as of the "Posted" date above. Confirm material classifications, exemptions, and reporting obligations with your attorney, compliance professional, vendors, and the applicable state program.
