Carbon & sales tax exemptions
When the Climate Commitment Act costs came into effect at the beginning of 2023, most fuel distributors passed on the carbon tax to agricultural customers.
Charging agricultural users for the carbon tax was an error. The law is clear:
The carbon tax does not apply to emissions from “motor vehicle fuel or special fuel that is used exclusively for agricultural purposes by a farm fuel user.” RCW 70A.65.080(7)(e)(i).Whether you purchase a full transport load or partial load, AGRICULTURAL USES ARE EXEMPT from the carbon tax resulting from the state Climate Commitment Act.
“Agricultural purposes” means the performance of activities directly related to the growing, raising, or producing of agricultural products. A “farm fuel user” is defined as a farmer or “a person who provides horticultural services for farmers, such as soil preparation services, crop cultivation services, and crop harvesting services.” RCW 82.08.865 (2)(a)(i) & RCW 82.08.865 (2)(e)Washington State Dairy Federation has asked all fuel distributors in Washington State to take immediate action to also stop applying the carbon tax to agricultural users and to credit back to the farmers the charges that have been applied since the beginning of 2023.
If you are a fuel distributor NOT charging the Carbon Tax and you are not listed below, please contact Alicia McCarthy at alicia@wastatedairy.com.
Fuel Distributors not charging Carbon Tax
Updated April 2025
| Name | Service Area | Contact Info | Website |
|---|---|---|---|
| Ag Supply Company of Wenatchee | North Central Washington | 115 N. Wenatchee Ave. Wenatchee, WA 98801 | Ag Supply (ag-supply.net) |
| Byrnes Oil | Walla Walla | 1205 N. 11th Ave. Walla Walla, Washington | Byrnes Oil |
| Campo & Poole Distributing | PNW | PO Box 309 Ontario, OR 97914 | Campo & Poole Distributing: Oregon │ Idaho │ Washington |
| Carson | PNW | 3125 NW 35th Ave Portland, OR 97210 | Carson (carsonteam.com) |
| Christensen | Pasco, Grandview, Yakima, Seattle, Tacoma, Portland, Bellingham | 1060 Jadwin Ave. Richland, WA 99352 | Christensen |
| CHS Northwest | Whatcom County | PO BOX 928 WALLA WALLA, WA 99362-0270 | Farm & Home – CHS |
| Coleman Oil | Eastern Washington | PO Box 1308 Lewiston, ID. 83501 | Coleman Oil Company |
| Connell Oil | Spokane, Othello, Connell, Basin City, Tri- Cities, Prosser, Sunnyside, Yakima, Moses Lake | 1015 N Oregon Ave. Pasco, Washington, 99301 | Climate Commitment Act (connelloil.com) |
| Ed Staub & Sons | PNW | 1301 Esplanade Ave Klamath Falls, OR 97601 | Ed Staub & Sons |
| Eljay Oil | Eastern Washington | 7815 E Valleyway Spokane, WA 99212 | Eljay Oil |
| James Oil Co. INC. | Enumclaw | 666 Griffin Ave. Enumclaw, WA 98022 | James Oil Company – |
| Pelican Fueling, Inc | Western Washington | 5507 N. Railroad Ave. Pasco, WA 99301 | www.pelicanfueling.com |
| PTL Marine | PNW | P.O. Box 589 Wood River, IL 62095 | PTL Marine | Home |
| Nelson-Reisner | Whatcom, Skagit, Snohomish and Island Counties | 500 Kentucky St Bellingham, WA 98225 | Nelson-Reisner |
| Shepherds Oil LLC | Wenatchee, Cashmere, Dryden, Leavenworth, Malaga, Waterville Plateau | 6 Fifth St. Wenatchee, WA 98801 | Shepherds Oil (shepherdsoil.com) |
| Skagit Farmer Supply | Skagit | PO BOX 266 BURLINGTON, WA 98233 | Skagit Farmers Supply |
| Small and Sons Oil Distribution Co. | Western Washington | PO Box 626 Auburn, WA 98071 | Small and Sons Oil Distribution Company |
| Snider Energy Company | Western Washington | P.O. Box 368 Sumner, WA 98390 | Snider Energy |
| Sun Pacific Energy Inc. | Washington | 501 W Canal Dr Kennewick, WA 99336 | Sun Pacific |
| TACenergy | Washington | 701 South Robison Road Texarkana, TX 75501 | TACenergy |
| Valley Wide Cooperative | Eastern Washington | 2114 N. 20th St. Nampa, ID 83687 | vwcenergy.com |
| Whitley Fuel | Eastern Washington | 1617 2nd Ave. North, Okanogan, WA 2733 N Pittsburg St, Spokane, WA | WhitleyFuel.com |
| Wilcox & Flegel | Southwest Washington | PO BOX 69 LONGVIEW, WA 98632 | Wilcox + Flegel | Oil Company |
| World Kinect Energy Systems | Seattle | World Kinect Energy Services | Energy Solutions | |
| Yakima Cooperative Association | Yakima | 501 S. Front St Yakima, WA 98901 | Yakima Co-op (yakimacoop.com) |
Are you being charged for exempt fuel?
Follow these steps:
Exemption Certificate
1. Make sure your fuel distributor(s) have on file for you Washington Department of Ecology Exemption Certificate for Agricultural Purposes and Maritime Fuel Users. It is referred to as Form ECY 070-721 and can be found online here: Exemption Certificate. The exemption certificate is necessary for the agricultural user to be exempt from the carbon tax.
Wholesale & Sales Tax Certificate
2. Make sure your fuel suppliers and other suppliers have on file for you the Farmer’s Certificate for Wholesale and Sales Tax Exemptions. This form is used for:
A. Wholesale purchases (like chemicals, feed, seed, and more).
B. Retail sales tax exemptions (like livestock for breeding, cows producing an agricultural product, animal pharmaceuticals, diesel & biodiesel used for farming, nutrient management equipment & facilities, replacement parts & repairs for certain machinery, anaerobic digesters & repairs, and more).
C. There are other non-dairy agricultural items and activities that are exempt from sales tax that might occur on your farmland. Link to form can be found online here: Wholesale and Sales Tax Certificate.
Reimbursement
3. If you have already been charged the “carbon tax,” you are owed a refund or credit.
Ask your fuel distributor to refund or credit to your account the carbon allowance or “carbon tax” charges you have already paid.
How much do they owe you?
1. If they listed it on previous invoices, that is the amount you are owed. This is the best approach.
2. If they did not list it as a separate line item, ask them to disclose that amount. Their accounting should show what the suppliers (refineries) charged the distributor. This is what was likely passed on to the farm. This is the second-best approach.
3. If the distributor cannot or will not tell you the amount you were charged, you could ask them to rebate or credit the amount based upon the carbon credit auction at the time. This is the third-best approach.
Based on carbon credit auctions, here are the best estimates for the carbon tax (not including any “markup.”)
January – May 2023 $0.495/gallon of diesel.
May – August 2023 $0.572/gallon of diesel.
Calculating the cost per gallon of diesel from the state carbon tax:
If:
1. A gallon of diesel emits 22.5 pounds of CO2 (Carbon Footprint Factsheet | Center for Sustainable Systems (umich.edu) AND
2. 22.5 lbs. = 0.0102058325 metric tons (Convert pounds to metric tons – Weight / Mass Conversions (checkyourmath.com)) AND
3. The price per metric ton was $56.10 in the Washington carbon auction (Washington Cap-and-Invest Program Auction #2 May 2023 Summary Report)
THEN: The cost the “carbon tax” per gallon of diesel should be $0.572. ($56.10 x 0.0102058325 = $0.57254720325)
GET IN TOUCH
Washington Farm Fuel Tax 