Hazardous substance tax

The Hazardous substance tax is a tax on the first possession in Washington of hazardous substances, including petroleum products, certain pesticides and some chemicals.

Products subject to the hazardous substance tax (HST)

• Petroleum products.
• Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) listed substances.
• Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) registered pesticides.
  • Note: Minimum risk pesticides that are exempt from registration under the FIFRA 25(b) are not subject to HST.

These lists are not exclusive. If additional petroleum products are identified in the future, the department will add them to the applicable list. Products added to the lists will be subject to HST for every period the tax applies, even if the product was not on the list at the time.

If you cannot determine if a product is subject to HST using the hazardous substance lists, you may write to the department for a ruling.

How to pay the tax

The tax is reported on the excise tax return. There are two different lines:

• Hazardous Substance Tax by Volume (measured on a per barrel basis).
• Hazardous Substance Tax by Value.

HST tax rates

Petroleum products measured on a per barrel basis are subject to a per barrel (42 gallons) rate according to the table below. The per barrel rate on petroleum products will be adjusted for inflation on July 1 each year.

Petroleum products not easily measured on a per-barrel basis:

• Products that remain in a liquid state at standard temperature and pressure of 25°C (or 77°F) and 1 atmosphere (or 14.7 pounds per square inch) are subject to HST on a per barrel basis according to the table above. When filing your excise tax return, for these products use the Hazardous Substance Tax by volume line.
• Products that do not remain in a liquid state under these conditions will continue to be taxed at a rate of 0.7% (0.007) multiplied by the wholesale value of the petroleum product. When filing your excise tax return, for these products, use the Hazardous Substance Tax by Value line.

Non-petroleum products are subject to a rate of 0.7% (0.007) multiplied by the wholesale value of the products. When filing your excise tax return, for these products, use the Hazardous Substance Tax by Value line.

Examples of products not easily measured on a per barrel basis

• Ethane.
• Propane.
• Butane.
• Petroleum coke.

Examples of products measured on a per barrel basis

• Gasoline.
• Aviation fuel.
• Kerosene.
• Diesel fuel.
• Liquid bitumen.
• Lubricating oil.
• Bunker fuel.

HST funds

The Department of Ecology uses the funds to help clean up and manage solid and hazardous wastes in the state of Washington.

Exemptions

HST applies to the first possession of hazardous substances in Washington. Any subsequent possession of a product is exempt from HST, after the first possessor has paid the tax. If the first possessor has not paid the HST, the Department of Revenue may collect the tax from any owner who has had possession.

Agricultural crop protection products that you warehouse, but do not otherwise use or sell in Washington, are exempt from HST. This exemption applies as long as you do not use, manufacture, package for sale, or sell the substances in this state. This exemption expires Dec. 31, 2027.

Hazardous substance tax credits

The law describes three kinds of tax credits you may take against HST liability:

Combining hazardous substances to create a new hazardous substance

If you create a new hazardous substance by combining other kinds of hazardous substances, you owe HST on the new hazardous substance. However, you may take a credit for the HST you already paid on the original substances.

Tax paid on fuel in fuel tanks

You may take a credit for the tax you paid on the value of fuel carried from this state in the fuel tank of airplanes, ships, trucks, or other vehicles. This gives you a tax credit for fuel that was taxed, but not used, in Washington.

Tax paid to another state

If you already paid similar hazardous tax to another state, you can take a credit against Washington’s HST for tax you paid to the other state. However, the hazardous substance tax you paid to another state must be on the same substances you bring into Washington.