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Division of Taxation

Spill Compensation & Control Tax Overview

The Spill Compensation and Control Tax is imposed on owners or operators of one or more major facilities used to refine, store, produce, handle, transfer, process, or trans­port hazardous substances, including petroleum products, to ensure compensation for cleanup costs and damages due to discharge of hazardous substances.

The tax is also imposed on owners of a hazardous sub­stance which is transferred to a public storage terminal, and to any transferor of a previously untaxed nonpetro­leum hazardous substance from a major facility to one which is a nonmajor facility.

  1. Nonpetroleum hazardous substances—1.53% of fair market value;

  2. Petroleum products—$0.023 per barrel;

  3. Precious metals—$0.023 per barrel;

  4. Elemental phosphorus—$0.023 per barrel; and

  5. Elemental antimony or antimony trioxide—$0.023 per barrel, with annual approval.
The tax rate may be increased in the case of a major dis­charge or series of discharges of petroleum products to a rate not to exceed $0.04 per barrel until the revenue pro­duced by the increased rate equals 150% of the total dol­lar amount of all pending reasonable claims resulting from the discharge.

The tax for an individual taxpayer facility which paid the tax in 1986 is capped at a certain percentage of the tax­payer’s 1986 liability. Other tax cap benefits may apply.

Disposition of Revenues
The proceeds constitute a fund (New Jersey Spill Com­pensation Fund) to ensure compensation for cleanup costs and damage associated with the discharge of petroleum products and other hazardous substances.

Last Updated: Wednesday, 01/15/20