Washington Updates Hazardous Substance Tax Rate
The state has increased its tax on petroleum products to $1.49 per barrel as of July 1, 2026.
Updated on Oct. 15, 2026 in Oil and Gas
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The Washington Department of Revenue has implemented a new hazardous substance tax rate for petroleum products, setting the levy at $1.49 per barrel. This change, which took effect on July 1, 2026, marks an increase from the previous rate of $1.48 per barrel.
Why it matters
The hazardous substance tax functions as a state mechanism to manage the fiscal impact of handling materials that pose potential environmental risks. Adjusting these rates ensures that the state continues to collect revenue based on the volume and wholesale value of substances possessing hazardous properties.
The tax rate for qualifying liquid petroleum products is now $1.49 per barrel, up from the prior $1.48. Non-petroleum hazardous substances and non-liquid petroleum products are subject to a separate tax rate of 0.7 percent of their wholesale value.
The players
Washington Department of Revenue
This state agency is responsible for administering tax laws and collecting revenue to support government services in Washington.
The details
The tax applies to the first possession of these substances within the state. While liquid petroleum products are taxed by volume, other hazardous substances and non-liquid petroleum varieties are taxed based on their wholesale value.
Timeline
July 1, 2026: The new tax rate became effective.
June 30, 2027: The current tax rate is scheduled to expire.
Market Landscape
This tax adjustment occurs within the established framework of the Washington Hazardous Substance Tax. It reflects the ongoing state effort to align tax collections with the economic and environmental costs associated with the handling of hazardous materials.
The change in tax rates may influence pricing strategies for companies involved in the first possession of petroleum products within the state. Consumers might see these adjustments reflected in the broader costs associated with petroleum-based goods and services.
The takeaway
Tax adjustments on hazardous substances provide a predictable revenue stream for the state while accounting for material handling. Businesses should verify their compliance status to ensure they meet the current per-barrel or percentage-based tax requirements.
Further reading
Learn more about energy taxation in Washington Oil and Gas.
Source note: This article includes information reported by Bloombergtax.
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