Hazardous Substance Tax
The Model Toxics Control Act (MTCA), Washington’s environmental cleanup law, authorizes a broad range of work to clean up, properly manage, and prevent releases of hazardous substances across the state. To accomplish this work, Washington voters authorized a tax on hazardous substances, including petroleum products and certain pesticides and chemicals.
The Hazardous Substance Tax (HST) is the largest source of funding for a broad range of environmental and public health work across Washington. The HST supports about 40% of Ecology’s base operating budget and provides over $100 million in capital funds each biennium. We pass through most of the capital funds to local governments, tribes, and other qualified entities.
HST revenue is used to clean up contaminated sites, to prevent and mitigate pollution, and for stormwater pollution control projects. Under MTCA, and with the support of the HST, more than 7,000 contaminated sites in Washington have been successfully cleaned up.
About the tax
The HST applies to more than 8,000 hazardous substances, including petroleum products and certain chemicals and pesticides. The person or business that takes “first possession” of a hazardous substance within Washington is responsible for paying the tax. However, the tax is often passed through to end users of the substance or product. As of July 1, 2019, the tax rate is:
- $1.09 per barrel (42 gallons) for liquid petroleum products (such as gasoline)
- 0.7% of the wholesale value ($7 per $1,000) for other taxable hazardous substances
Washington’s Department of Revenue (DOR) collects and administers the HST. For more information, including how to pay the tax and a list of substances subject to the tax, visit DOR’s Hazardous Substance Tax webpage.
Uses of tax revenue
The first $50 million per biennium of HST revenue from liquid petroleum products is deposited into the state Motor Vehicle Fund. This revenue must be used exclusively for transportation stormwater purposes. The remaining HST revenue from liquid petroleum products is deposited into the three MTCA accounts:
- 60% into the Model Toxics Control Operating Account
- 25% into the Model Toxics Control Capital Account
- 15% into the Model Toxics Control Stormwater Account
HST revenue from all other hazardous substances, including non-liquid petroleum products and certain pesticides and chemicals, is deposited into the Model Toxics Control Capital Account.
More than 95% of the revenue deposited in the MTCA accounts comes from HST revenue. The remaining 5% comes from fees, cost recovery, fines, and other sources.
We publish two recurring legislative reports that describe how we're using — or plan to use — funds from the Model Toxics Control Act (MTCA). You can download the latest reports on our Legislative Reports webpage.
Changes to the tax
As specified in the bill, these changes are intended to:
- Increase funding for programs and projects related to clean air, clean water, and toxic cleanup and prevention, with specific focus on stormwater pollution.
- Eliminate the volatility of HST revenues by moving to a volumetric rate for liquid petroleum products.
- Provide distinct and transparent financial separation of capital and operating budget funding.