A well-defined exemption rule vital for farmer relief from illegally-applied fuel tax is urgently needed

EVERSON, Wash. – Governor Inslee’s Climate Commitment Act and the associated Carbon Tax, coupled with the Department of Ecology’s failure to follow the law’s requirement to create a rule for suppliers and distributors to exempt fuel used in agriculture, has led to a complex situation where farmers are facing unexpected financial burdens (Engrossed Second Substitute Senate Bill 5126; pgs 27-28).

Claiming his Climate Commitment Act would “cost pennies,” Governor Inslee’s fuel tax, promoted as a way to support environmental conservation, ended up financially straining the already cash-strapped farming community in Washington unnecessarily, due to the lack of a clear exemption process for fuel used in farming.

Without a clear exemption rule, this has led to confusion and uncertainty among farmers, fuel suppliers and distributors, adding an additional layer of complexity to an already challenging industry. Farmers are facing increased costs, competitive disadvantages, and financial uncertainty. This burden is particularly challenging for small-scale farmers, who have limited financial resources to absorb extra expenses. 

The absence of a process to exempt farming from the surcharge and the resulting financial strain hinders farmers’ ability to make investments in efficiency and sustainability, undermining both economic growth and environmental progress. Additionally, the added costs associated with the carbon tax place Washington State farmers at a competitive disadvantage compared to their counterparts in neighboring states where such a tax does not exist.

Despite the additional cost and risk to themselves, some fuel distributors have taken it upon themselves to alleviate the burden on farmers and provide fuel used for agricultural purposes at the exempted rate, recognizing the vital role that farmers play in the state’s economy and food supply chain.

A recently created website lists the fuel distributors so far not applying the carbon tax on fuel purchased for agriculture purposes. This website also gives detailed instructions on how farmers can apply for the exemption and how they can get the appropriate wholesale & sales tax certificate, with other helpful calculations.

To ensure Washington farmers’ ability to grow food and steward a healthy environment, it is critical for the Department of Ecology to address this issue immediately and provide relief for farmers through a well-defined exemption process.