Since there’s so much concern in Olympia about Washington’s oil industry, it’s worth examining the state’s tax burden. I checked in with the Gaia-worshipping hippies at the American Petroleum Institute. And wouldn’t you know it? Contrary to the stuff you hear from industry lobbyists, API’s own analysis shows that Washington is unexceptional.
To the right, you can see what West Coast gasoline taxes look like.
Washington’s taxes are quite a bit lower than California’s. And while it’s true that Oregon’s taxes are lower yet, it’s important to remember that there is no significant oil industry in Oregon—and there are no refineries. (Drivers in Oregon mostly buy fuel that is imported from Washington or California.) From the perspective of the oil industry, what matters most is probably the comparison between Washington and California.
Am I cherry-picking by focusing only on the West Coast? Sort of, but not really. You can see API’s full map here and the full analysis here. They reveal is that Washington’s gasoline taxes are really quite comparable to the taxes in high-population oil-importing states like Florida, the northeast, and the Great Lakes states. (The exception is the Gulf Coast, where states like Texas and Louisiana have exceptionally low gasoline taxes.)
Still, comparisons aside, there’s an open question about whether its fair to notch up Washington’s small hazardous substance tax. For now, I’ll leave that question to wiser heads.
Notes: The numbers shown here are current as of January 2010. They combine local, state, and federal taxes. They don’t include some other taxes that affect the oil industry such as California’s corporate profits tax or Washington’s business and occupation tax and hazardous substance tax. They also don’t account for the differences in property taxes (higher in California) or oil spill taxes (also higher in California).