Hazardous Substance Tax

The Model Toxics Control Act (MTCA) is Washington’s environmental cleanup law. It authorizes a broad range of work to clean up and prevent contaminated sites. To do this work, Washington voters authorized a tax on hazardous substances, such as petroleum products, pesticides, and other chemicals. Revenues from this Hazardous Substance Tax are deposited into the MTCA accounts. The money helps pay to clean up and prevent pollution.

Hazardous Substance Tax helps clean up and prevent contamination

In 1988, Washington voters passed Initiative 97. In 1989, it became the state’s cleanup law, the Model Toxics Control Act (MTCA). MTCA authorizes funding for a broad range of toxic cleanup, management, and prevention activities at state and local levels. To do this work, voters authorized a tax on hazardous substances.

The Hazardous Substance Tax (HST) is imposed on first possession of these substances in our state. They’re taxed at a rate of 0.70 percent of the wholesale value ($7 tax per $1,000 product value).

The tax applies to more than 8,000 different hazardous substances. Washington’s Department of Revenue (DOR) collects and administers it. Ecology helps taxpayers and DOR determine if particular products or substances are subject to the tax. Visit DOR’s Hazardous Substance Tax website for more information.

Revenues from the HST are deposited into three accounts: State Toxics Control Account, Local Toxics Control Account, and Environmental Legacy Stewardship Account. Together, these are known as the MTCA accounts.

More than 95 percent of the revenue deposited in the MTCA accounts comes from HST payments. The remaining 5 percent comes from fees, revenues from cost recovery efforts, fines, and other revenues.

Current revenue issues are impacting cleanups

MTCA cleanups improve the state’s environment, economy, and quality of life. Funding for these cleanups comes from the Hazardous Substance Tax. Since most of the revenues come from taxes on petroleum products, these revenues have been in a prolonged period of volatile pricing. Based on the November 2016 forecast, the Department of Revenue forecasts a significant shortfall of MTCA funds in the 2017-19 biennium.

Governor Inslee’s 2017–19 budget proposes several ways to manage the revenue decreases in the MTCA accounts. They provide moderate new investments in toxic sites cleanup, solid waste management, and operating programs.

We’re continuing to take cost-saving actions authorized by the enacted 2015–17 capital budget and supplemental budget. These include delaying some cleanup projects and delaying staff hires. We’re working with many stakeholders whose cleanup projects are also impacted by this continuing revenue shortfall.

Which laws direct the HST?