Extended producer responsibility (“EPR”) laws have moved from an emerging environmental concept to a practical, multistate business issue. These laws can affect companies that sell or distribute packaged goods, consumer products, or other covered products into states with EPR programs, including Nebraska businesses with regional, national, or e-commerce sales. For CPAs, the relevance is practical: EPR obligations can flow through a client’s budgeting, product costing, data systems, internal controls, and financial reporting.

What Is EPR?

EPR laws require producers to take financial and operational responsibility for the collection, recycling, and disposal of their products and packaging after consumer use — often requiring producers to pay fees for packaging they sell or distribute in a state — thereby shifting these obligations from governments to companies that place goods in the market. The intent is to encourage product redesign, waste reduction, and more sustainable business models. A producer’s obligations commonly include state registration, participation in a producer responsibility organization (“PRO”), annual fees, and support for recycling or education programs. Because fees depend on the volume and characteristics of covered materials, packaging decisions directly affect financial outcomes.

Covered “producers” often include manufacturers and brand owners, and in some cases extend to importers, exclusive distributors, private-label retailers, and others introducing products into a state’s market. Covered “products” are similarly broad, including packaging for food, paper goods, cosmetics, automotive products, and other single-use consumer items. Legal counsel should advise on producer status, but CPAs can help clients identify when their sales footprint and product mix may warrant such a review.

Most programs rely on a PRO for administration. PROs are not-for-profit entities that manage collection and recycling on behalf of members, which allows smaller producers to share the cost of compliance infrastructure rather than building their own recycling and reporting systems individually. PRO participation involves fee collection, assessments, reporting, audit requirements, and documentation standards similar to other recurring compliance processes.

EPR laws are in effect in numerous states: Maine, Oregon, California, Colorado, and Minnesota have enacted packaging EPR frameworks, while additional states have advanced similar programs. As of the date of this article, Nebraska has not adopted an EPR reporting law. As these programs are implemented, businesses are facing clearer expectations around reporting timelines, fee structures, and data collection.

Practical Questions CPAs Should Ask Clients

CPAs do not need to become EPR lawyers. They can, however, ask practical questions that help clients prepare the financial and operational information needed for compliance and decision-making:

• Where are products sold or shipped? Review sales and shipping data by state to identify where EPR-related costs or reporting needs may arise.
• What packaging data is available? Inventory material type, weight, recyclability, and product category to support client management in fee estimates, forecasts, and cost allocations.
• Can the accounting system capture the right information? Clients may need new supplier data or reporting processes to connect product sales with packaging attributes.
• What costs should be estimated? Consider direct fees, PRO collection fees on behalf of states, system updates and reporting labor, audit or certification costs, and potential changes to packaging or suppliers.
• How could packaging choices affect margins? Because fees often vary by material type and recyclability, packaging changes may affect product-level profitability, pricing, and supplier negotiations.
• Are controls and documentation in place? Establish review procedures, source-document retention, and reporting calendars to ensure EPR-related data is complete, consistent, and timely.
• Could EPR affect transactions or due diligence? For clients buying, selling, or investing in product-based businesses, EPR exposure may affect working capital, contingent liabilities, and post-closing compliance costs.
• What are the risks of noncompliance? States with EPR programs may impose fines, penalties, or sales prohibitions on producers that fail to register or meet reporting obligations. Beyond direct financial exposure, noncompliance can create reputational risk with consumers who increasingly expect sustainable packaging practices from the brands they support.

The Takeaway

EPR matters are relevant to CPAs because accountants are responsible for translating packaging and sales data into recurring inputs for budgeting, reporting, and financial analysis. Many clients do not yet track this information in a coordinated way, especially across multiple states, which can affect accounting processes, internal controls, and management decision-making well before EPR compliance deadlines arrive. As EPR becomes a routine consideration for companies selling packaged goods across state lines, CPAs who understand the basics can help clients prepare proactively by pinpointing missing data, streamlining data collection efforts, establishing processes that support more reliable forecasting and reporting, and, as these programs expand, directing clients to outside counsel as needed.