Oil spill response tax and oil spill administration tax

What are oil spill taxes?

Oil spill response and oil spill administration taxes apply when a marine terminal or bulk oil terminal receives crude oil or petroleum products in Washington from:

• Vessels or barges.
• Rail tank cars.
• Pipelines.

How do I pay the taxes?

The owner of the crude oil or petroleum products pays the tax directly to the marine terminal operator or the bulk oil terminal operator. 

If the crude oil or petroleum products owner possesses a direct pay permit, then they may pay the tax directly to the Department of Revenue.

What are the tax rates?

• The oil spill response tax rate is 1 cent per 42-gallon barrel of crude oil or petroleum product.
• The oil spill administration tax rate is 4 cents per 42-gallon barrel.

When does the oil spill response tax apply?

When funds in the oil spill response account fall to $8 million, owners of crude oil or petroleum products must pay the oil spill response tax. Once the account balance exceeds $9 million, the department turns the tax off until the account balance dips below $8 million again.

The oil spill administration tax applies regardless of the balance of the oil spill response account.

What are the funds used for?

The state uses the oil spill tax revenues as follows:

• The oil spill response tax pays for oil spills that have clean-up costs of more than $50,000.
• The oil spill administration tax pays for:
  • Oil spill prevention.
  • Oil spill response.
  • Habitat restoration.

Is there a credit?

Taxpayers may claim a credit against oil spill taxes paid on crude oil or petroleum products subsequently exported or sold for export from the state. The taxes only apply to products consumed within the state.