What is the hazardous substance tax?
It is a tax on the first possession of hazardous substances in Washington. The Department of Ecology determines which substances are subject to the tax. The tax applies to petroleum products, pesticides, and certain chemicals. There are currently over 8,000 different hazardous substances identified as being subject to the tax.
How do I pay the tax?
The tax is reported on the excise tax return.
What rate do I pay?
The rate is .007 of the wholesale value.
What are the funds used for?
Funds are distributed to the Department of Ecology to help clean up and manage solid and hazardous waste in the state of Washington
Hazardous substance tax credits
The law describes three kinds of tax credits the taxpayer may take against the hazardous substance tax (HST) liability:
First credit scenario
The taxpayer creates a new hazardous substance by combining two other kinds of hazardous substances. The taxpayer may take a credit against the HST the taxpayer already paid on the original two substances.
(The law allows a credit to offset this amount since the taxpayer already paid HST on the first two substances).
Second credit scenario
The taxpayer may take a credit in the amount of HST fuel value that the taxpayer carries in this state. The fuel must be in the fuel tank of any airplane, ship, truck, or other vehicle.
Third credit scenario
The taxpayer already paid similar hazardous tax to another state. So, the taxpayer can take Washington’s HST credit for the amount they paid to the other state. However, the hazardous tax the taxpayer paid to another state must be on the same substances the taxpayer brings into Washington.
See WAC 458-20-252 for more credit information, requirements, examples, and necessary certificates/records.
Crop protection products exemption from hazardous substance tax
If you transport or warehouse (store) agricultural crop protection products that are solely for use by a farmer or certified applicator, you are exempt from Hazardous Substance Tax (HST). This applies as long as the person possessing the substance does not use, manufacture, package for sale, or sell the substance in this state.
"Agricultural crop protection product" means a chemical regulated under the federal insecticide, fungicide, and rodenticide act, 7 U.S.C. Sec. 136 as amended as of September 1, 2015, when used to prevent, destroy, repel, mitigate, or control predators, diseases, weeds, or other pests.
For more information please see RCW 82.21.040(5).
Exemption for agricultural protection products stored, but not used in Washington
Effective September 1, 2015 there is an exemption from the Hazardous Substance Tax for possession of agricultural crop protection products that are warehoused, but not otherwise used or sold in Washington. For more information please see our Special Notice.