The California 10-cent bag fee goes entirely to the store. It is not a tax, and no portion is sent to the state or any other government agency. The charge is a minimum sale price set by law so the people who take a paper bag at checkout cover its cost, instead of that cost being folded into prices for everyone.1California Legislative Information. California Public Resources Code 42283
Where the 10 Cents Actually Goes
The statute frames the 10 cents as a minimum sale price for a recycled paper bag, not a fee or tax collected on behalf of the government. Its stated purpose is to “ensure that the cost of providing a recycled paper bag is not subsidized by a consumer who does not require that bag.”1California Legislative Information. California Public Resources Code 42283
From the store’s side, 10 cents isn’t pure profit. Compliant recycled paper bags cost wholesalers roughly 5 to 8 cents each for smaller sizes, and larger handled shopping bags can run well above 10 cents. Shipping, storage, and stocking every checkout lane are on top of that. A store can charge more than the minimum, but most stay close to 10 cents.
The charge is also not subject to sales tax. The California Department of Tax and Fee Administration has stated that the amount charged for carryout bags is not included in a retailer’s gross receipts for sales tax purposes, so a $0.10 line on your receipt is the full amount owed.
When You Don’t Have To Pay It
You can bring your own bag of any material and skip the charge. A store also cannot require you to buy a paper bag as a condition of making a purchase.1California Legislative Information. California Public Resources Code 42283
If you pay with a WIC voucher or an EBT card issued through CalFresh, the store must provide a recycled paper bag at no cost. The law prohibits charging the 10 cents to customers using those benefits, and the exemption is supposed to apply automatically at the register.1California Legislative Information. California Public Resources Code 42283
In-Store Bags That Are Always Free
Several bag types are exempt from the charge because they aren’t standard checkout bags. Each serves a specific protective or containment purpose:
- Pre-checkout bags you tear off a roll in the produce or bulk aisle to hold loose fruits, vegetables, meat, fish, nuts, grains, candy, or bakery items.
- Pharmacy bags provided to hold prescription medication.
- Nonhandled protective bags used to keep a purchased item from damaging or contaminating other items in your paper bag.
- Nonhandled garment bags placed over clothing on a hanger, like those used by dry cleaners.
None of these replace a checkout bag, so none of them carry the 10-cent charge.2California Legislative Information. California Public Resources Code 42280
What You Get for the 10 Cents
As of January 1, 2026, the only bag a covered store can sell at checkout is a recycled paper bag. Plastic carryout bags, including the thicker “reusable” plastic bags stores used to sell for 10 cents, are no longer allowed at the point of sale.3CalRecycle. Bag Requirements at Grocery and Retail Stores
Each paper bag must be accepted in curbside recycling programs across the state and must have the manufacturer’s name, country of origin, and postconsumer recycled content percentage printed on it.2California Legislative Information. California Public Resources Code 42280 Beginning January 1, 2028, every paper bag sold at checkout must contain at least 50 percent postconsumer recycled material. Until that date there is no specific minimum percentage, though the labeling and recyclability requirements still apply.3CalRecycle. Bag Requirements at Grocery and Retail Stores
Which Stores Charge the Fee
The rule covers most large grocery stores, retail stores with a pharmacy, convenience stores, food marts, and liquor stores. Smaller specialty shops that don’t fit any of those categories aren’t bound by the same requirements and may handle bags differently.2California Legislative Information. California Public Resources Code 42280
What Happens if a Store Charges Wrong
Cities, counties, and the California Attorney General can all enforce the bag rules.3CalRecycle. Bag Requirements at Grocery and Retail Stores Under the prior SB 270 framework, fines started at $1,000 per day for a first violation, rose to $2,000 per day for a second, and reached $5,000 per day for a third or subsequent violation.4CalRecycle. [Archives] Single-Use Carryout Bag Ban (SB 270) A store that hands out plastic carryout bags or fails to charge the minimum 10 cents for paper risks those daily fines until it comes into compliance.