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Spill Compensation & Control Tax

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: Thursday, 09/30/10

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