California Textile EPR (SB 707): Are You a 'Producer'?

Two textile deadlines landed on apparel founders this month, one on each side of the Atlantic — and the first one is quietly asking whether it already applies to you. Are you a "producer" under California's textile EPR (SB 707)? If you sell apparel or textile goods into California and clear more than about $1 million in global sales, then most likely yes — you're already a "producer," even with zero offices or warehouses in the state. Under roughly $1M, or if you sell only secondhand, you're exempt today.

The two events don't work the same way, but they rhyme. On July 1, 2026, California's textile EPR law opened producer registration. Days later, on July 19, 2026, the EU's ban on destroying unsold apparel took effect for large companies. Same underlying pressure, two different mechanisms: the deadstock in your warehouse is getting harder to throw away for free. Here's how to tell whether either one reaches you yet — and why July 1 is not the panic date the headlines make it.

Key takeaways

• "Producer" is defined by what you sell and where, not where you're based. If you put apparel or textile articles into the California market — including as an out-of-state or online-only (DTC) brand — SB 707 can reach you. Physical presence in California isn't required.
• The small-seller exemption is real, and it's measured on global turnover. The statute excludes any seller under about $1 million in annual aggregate global sales (indexed to California's CPI). Secondhand sellers are excluded too.
• July 1, 2026 is a "get identified" date, not a "pay a fee" date. Actual reporting and fees are gated to rulemaking that can't take effect before 2028, with full rollout in 2030. And the very organization producers were told to join is being challenged in court.
• SB 707 does not ban destroying unsold clothes. It makes producers help pay to collect and recycle textiles. The outright destruction ban is the EU's move (ESPR Article 25) — not California's. Don't merge the two.
• The EU ban only touches "large" companies right now. Most small US brands aren't caught yet — mid-size companies aren't in until 2030, and micro and small ones aren't covered at this time. But the principle is arriving on both coasts.

What changed: two textile deadlines, days apart

California — July 1, 2026. SB 707, the Responsible Textile Recovery Act of 2024, is the first state-level textile extended producer responsibility (EPR) program in the US. Governor Newsom signed it on September 28, 2024. Under EPR, the companies that put a product on the market — not just consumers or municipalities — help fund its end-of-life collection and recycling. California's recycling agency, CalRecycle, approved the program's producer responsibility organization (PRO), Landbell USA, on February 27, 2026, and producers were directed to join the PRO starting July 1, 2026.

European Union — July 19, 2026. On the other side, Article 25 of Regulation (EU) 2024/1781 — the Ecodesign for Sustainable Products Regulation, adopted June 13, 2024 — makes it illegal to destroy unsold apparel, clothing accessories, and footwear. That prohibition became binding on large companies on July 19, 2026.

Two capitals, two mechanisms, one direction of travel: overproduced inventory is losing its status as something you can quietly bin at no cost. The important thing for planning is to keep the mechanisms straight — one charges you to recycle, the other forbids you to destroy. They are not the same law, and conflating them will send you fixing the wrong thing.

Are you a "producer" under SB 707?

This is the question that actually decides whether SB 707 is your problem, so answer it before anything else.

Does SB 707 apply to online or out-of-state sellers? Yes, it can. "Producer" is written to cover the manufacturer, exclusive licensee, importer, or the distributor, wholesaler, or retailer that brings covered apparel and textile articles into the California market. Crucially, it's tied to selling into the state, not to being domiciled there — so an out-of-state or online-only brand shipping clothing to California customers can be a producer with no California office, no warehouse, and no employees in the state. If that reversal feels familiar, it's the same "sell into the market and the market's rules find you" logic that already governs a lot of cross-border commerce.

Is there a small-business exemption? Yes — and it's the line most founders will land on. The statute says, verbatim:

"'Producer' does not include a seller with less than one million dollars ($1,000,000) in annual aggregate global turnover"

Read that carefully, because two details do the work. First, the threshold is global aggregate turnover, not your California sales — a brand doing $1.5M worldwide but only a sliver of it in California still clears the bar. Second, that ~$1M figure is indexed each year to California's Consumer Price Index, so treat it as a moving line, not a fixed one. Sellers of secondhand goods are also excluded. In plain terms: over about $1M globally and selling apparel into California, you're likely a producer; under it, or resale-only, you're exempt today.

The covered products are broad — apparel plus many textile articles, and some home textiles (think curtains, blankets, towels, bedding) — so "we only sell home goods, not clothing" is not a safe assumption on its own.

Don't panic about July 1 — the real timeline

Here's the part the "register by July 1" headlines leave out. That date is a genuine statutory milestone, but two things mean it isn't a bill coming due.

The PRO itself is being challenged in court. On March 27, 2026, the American Apparel & Footwear Association (AAFA) — a trade group representing more than 1,100 brands across apparel, footwear, and textiles — sued CalRecycle and Landbell USA in Sacramento County Superior Court, asking the court to vacate Landbell's approval as the PRO. AAFA argues, among other things, that the law calls for a producer-led, registered nonprofit PRO and that Landbell's approval didn't meet those requirements. AAFA also moved for a preliminary injunction to pause implementation, and a hearing on that motion is set for August 7, 2026. However that turns out, it means the entity you were told to join is not settled.

The money is gated years out. Even on the statute's own schedule, the substantive machinery arrives in stages: a needs assessment is expected around March 2027, implementing regulations cannot take effect before July 1, 2028, and full program rollout is targeted for July 1, 2030. Fees and detailed reporting live inside that rulemaking — which is exactly why you won't see specific fee figures here: they don't exist yet.

So what's actually "due" now is not a payment. It's a determination: figure out whether you're a producer, and get ready to participate once the PRO question resolves and the rules are written. That's a research task for your team and counsel, not a check to write in July.

The EU side: a cross-border signal, not yet a bill for most small US brands

If you sell into Europe as well, the EU deadline is worth a look — but for most small US founders it's a signal about where things are heading, not an immediate obligation.

Article 25's destruction ban applies to economic operators that place these goods on — or destroy them in — the EU market, which means a US apparel or footwear brand selling into Europe can be caught if it is "large." Under the EU's accounting-directive definition, "large" means a company that meets two of three thresholds: more than 250 employees, more than €50M in revenue, or more than €25M in total assets. Mid-size companies aren't in until July 19, 2030, and micro and small enterprises are not covered at this time. A February 2026 delegated act also sets out roughly ten narrow situations where destruction is still allowed (safety hazards, damaged or defective goods, counterfeits, refused charity donations, and legal non-compliance among them) — and when a large company does destroy under one of those exceptions, it has to disclose destroyed unsold products annually and keep electronic records for five years.

Put California and the EU side by side, and the "same principle, different mechanism" point becomes concrete — as long as you attribute each rule to the right regime:

So can you still destroy unsold clothing in 2026? It depends entirely on which regime you're under. In the US, SB 707 doesn't prohibit it — the law makes producers help pay to recycle textiles, not stop them from disposing of goods. In the EU, a large company can no longer destroy covered unsold apparel, accessories, or footwear as of July 19, 2026. Same headline topic, opposite legal answer — which is exactly why the two shouldn't be blurred together.

What it means for you: overproduction is becoming a metered cost

Step back from the dates and the shape of the decade shows up clearly: the unsold inventory sitting in your warehouse is being repriced. Under California's model you'll eventually pay, through the EPR system, in rough proportion to how much you put on the market. Under the EU's model, above a certain size, you simply can't destroy it and have to route it somewhere else. Different instruments, same effect — deadstock is losing its free exit.

The practical takeaway is almost boring, which is why it's easy to miss: the cheapest form of compliance in either regime is making less deadstock in the first place. Both systems are built to reward keeping product in use over throwing it out — resale (including discount and alternative channels), donation to charity or social enterprises, and preparing goods for reuse through repair or refurbishment all sit above disposal in the hierarchy. A founder who tightens buys, sells through, and has a resale or donation path already has most of the compliance answer before the fee schedule is even written.

None of this is the only compliance line climbing on physical goods, either. If you import inventory into the US, it's stacking alongside the trade side of the ledger — the kind of shift we covered in why an expiring tariff probably won't drop your landed cost. The through-line for anyone selling physical product into the US market: the rules attached to those goods are multiplying, and they don't wait for you to have a compliance department.

Where this lands: your entity's US mailing address

A producer determination is a research-and-legal task, not a mailbox one — but there's a mailing layer underneath it that's worth getting right, because regulatory programs run on correspondence. Registering with a PRO, responding to a state agency, keeping records a rule requires you to keep for years: all of it generates mail and notices that have to reach a stable address tied to your business.

To be clear about what Auteur does and doesn't do here: we don't determine whether you're a producer, register you with a PRO, or give you legal advice — that's between you, your team, and qualified counsel. What a business address fixes is the layer underneath. When you run a US-facing brand off a home or apartment address, agency mail and compliance notices scatter across a place you may move out of, and plenty of remote and non-US founders have no stable US address at all.

If that's you, US founders can put a dedicated US business address behind the entity, handled through our partner SaveOffice on the US virtual office page — Auteur doesn't operate the US service directly. It won't change whether SB 707 considers you a producer. What it does is keep the paperwork that follows a compliance obligation landing in one place you actually control.

This is general information about developing US and EU regulations, not legal advice — confirm how SB 707 and ESPR Article 25 apply to your specific business with qualified counsel before you rely on it.

FAQ

Does California's textile EPR (SB 707) apply to online or out-of-state sellers? It can. "Producer" is defined by putting covered apparel or textile articles into the California market — as a manufacturer, importer, licensee, or the distributor, wholesaler, or retailer selling into the state — not by being based there. An out-of-state or online-only (DTC) brand shipping clothing to California customers can be a producer with no physical presence in the state, provided it's over the small-seller threshold.

Is there a small-business exemption from the California textile EPR? Yes. The statute excludes any seller with less than about $1 million in annual aggregate global turnover — note that's worldwide sales, not California sales — and the figure is indexed each year to California's CPI. Sellers of secondhand goods are also excluded. Under that line, or resale-only, you're exempt today; over it and selling apparel into California, you're likely a producer.

Do I have to register and pay a fee by July 1, 2026? July 1, 2026 opened producer sign-up with the program's PRO, but it isn't a fee deadline. Detailed reporting and fees are set by rulemaking that can't take effect before 2028, with full rollout targeted for 2030 — so specific fee amounts don't exist yet. On top of that, the PRO's approval is being challenged by a trade group (AAFA), with a preliminary-injunction hearing set for August 7, 2026. The task now is identifying whether you're a producer and preparing to participate, not writing a check.

Can you still destroy unsold clothing in 2026? It depends on the jurisdiction. In the US, SB 707 does not ban destruction — it makes producers help fund textile collection and recycling, but doesn't prohibit disposal. In the EU, under ESPR Article 25, large companies can no longer destroy covered unsold apparel, accessories, or footwear as of July 19, 2026, with mid-size companies following in 2030 and micro and small ones not covered at this time.

Bottom line

Two textile deadlines arrived days apart this month, and they rhyme without being identical. California's SB 707 charges producers to recycle; the EU's ESPR Article 25 forbids large companies from destroying unsold stock. The first question for a US apparel founder is simple: are you a "producer"? Sell apparel or textiles into California and clear about $1M in global sales, and you probably are — even from out of state. But July 1 is a "get identified and get ready" date, not a bill: the fees live in rulemaking that can't bite before 2028, and the PRO itself is in court. The real signal underneath both regimes is that overproduction is becoming a metered cost — which makes the cheapest compliance the oldest advice in retail: don't make the deadstock in the first place.