Washington State Dairy Federation sent a letter to fuel distributors doing business in Washington State regarding the carbon allowance charges (commonly referred to as the “carbon tax”) under the state Climate Commitment Act (CCA).

We are sending you a copy of this letter and asking you to do 3 things:

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.
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.
3. Please send us the contact information for your fuel distributor. The name of the company and address is all we need. We will not mention a specific farm or person as a source of this information. We have mailed information to a list we were able to generate from public agency sources but want to make sure that we reach everyone in the supply chain to make sure they are honoring the agricultural exemption from the “carbon tax” in the Climate Commitment Act.

You can email that supplier information to alicia@wastatedairy.com.

When the CCA 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.

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.

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).

"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)

Two distributors have already recognized the error and have stopped charging the carbon tax for agricultural customers. They are rebating or providing credits for carbon tax charges that were passed on to agricultural users since the beginning of 2023.

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.

Our Policy Director, Jay Gordon, has been tapped to serve on a task force with Department of Ecology to deal with the underlying exemption AND the creation of a 5-year additional exemption for on-highway fuel used to transport agricultural products. We’ll let you know when that additional exemption is worked out.

We also pushed for legislative action when the Legislature was in Olympia January through April. That effort was unsuccessful for a variety of reasons.

We haven’t given up and we need you to push your distributor to take action to stop charging the carbon tax on your exempt use. Please let us know if you have any questions.                     

We are writing to fuel distributors doing business in Washington State regarding the carbon allowance charges (commonly referred to as the “carbon tax”) under the state Climate Commitment Act (CCA).

When the CCA 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.

Whether they purchase a full transport load or partial load, agricultural uses are exempt from the carbon tax resulting from the state Climate Commitment Act.

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).

"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)

Two distributors have already recognized the error and have stopped charging the carbon tax for agricultural customers. They are rebating or providing credits for carbon tax charges that were passed on to agricultural users since the beginning of 2023.

We are asking 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.

The Washington Department of Ecology Exemption Certificate for Agricultural Purposes and Maritime Fuel Users is referred to as For ECY 070-721 and can be found online here: https://apps.ecology.wa.gov/publications/documents/ecy070721.pdf.

The exemption certificate is necessary for the agricultural user to be exempt from the carbon tax. We encourage you to provide the certificate to your agricultural customers. We are encouraging our farmers to also provide the form to their fuel suppliers.

We have included some other guidance documents from Department of Ecology that we hope will also clarify that the carbon tax does not apply to agricultural uses in Washington State.

We hope to have your partnership in quickly resolving charges that should not be applied to agricultural fuels.

And thank you for being an important part of the greater agricultural community that provides food, fiber, energy, and other important agricultural products.