Petroleum products tax

Starting Jan. 1, 2020, Washington’s Petroleum Products Tax (PPT) is reinstated until further notice.

PPT taxable and suspension periods:

What is the petroleum products tax?

The petroleum products tax is a tax on the first possession of petroleum products in Washington. This tax is imposed on the wholesale value of petroleum products in this state.

You may be able to take a deduction if you are a properly licensed petroleum products exporter that removes petroleum products at the rack for direct delivery outside of Washington.

Why is PPT collected?

PPT revenue funds an environmental cleanup account (Pollution Liability Insurance Program Trust).

• When the account balance is below $7.5 million, the department collects PPT.
• When the account balance is above $15 million, the PPT is temporarily suspended.

How do I pay the tax?

You report the tax when filing your exise tax return in MyDOR. The department will gray out the PPT line item on the return when the state temporarily suspends this tax.

What rate do I pay?

You pay the rate of .0015 on the wholesale value of the product.

Note: For reporting periods before July 1, 2021, the tax rate was .003.

What if I purchase petroleum products after someone else paid the PPT?

After you purchase the products, you may see a line item for PPT on your sales invoice. This does not mean that you owe PPT to the department. The seller is simply identifying that they already paid the PPT on the product you purchased. If you think the seller listed the PPT on the invoice in error, you need to contact the seller.

Definitions

Petroleum product includes plant condensate, lubricating oil, gasoline, aviation fuel, kerosene, diesel motor fuel, benzol, fuel oil, residual oil, and every other product derived from the refining of crude oil. Crude oil or liquefiable gases are not petroleum products.

Possession is the control of a petroleum product, and includes both actual and constructive possession.

• Actual possession occurs when the person with control has physical possession.
• Constructive possession occurs when the person with control does not have physical possession.

Control means the power to sell or use, or to authorize the sale or use by another.