Washington Oil Marketers Association

The Washington Oil Marketers Association (WOMA) is a non-profit trade association serving the needs of its members and the petroleum industry.

B&O Tax Pyramiding on Petroleum Products

In 2008, The Washington Oil Marketers Association (WOMA) commissioned a study to be done on the affects B&O tax pyramiding has on the price of fuel.  The results were interesting, and much like we expected.  We would like to share that report with you in hopes it provides a better understanding on the forbidding factors B&O tax plays on fuel distribution in the state of Washington.
WOMA is working with the State Legislature to reform the model used to tax petroleum products in an effort to break down competitive barriers and stabilize market prices in a time of volatility.
The following report was published by the Washington Research Council in 2008.
This report examines the Business and Occupation (B&O) taxes charged during the petroleum distribution process and presents a modified B&O tax structure that is revenue neutral.
In 2008, over 3.4 billion gallons of motor fuel were distributed and sold in Washington state. There are several methods of distributing fuel, as outlined in this report, but the current tax system is structured in a way that favors a vertically-integrated distribution system over one that has multiple tiers. The B&O tax is collected at every level of the distribution process, unless a single entity maintains control of the product. In comparing different tax scenarios, vertically-integrated companies were found to have significant competitive advantages over a distribution process that used several independent businesses. A scenario following the distribution of one million gallons of fuel found that the tax required of a vertically-integrated business was approximately $14,000 while a multi-business scenario had a tax obligation of nearly $56,000. The reasons include: multiple levels of taxation, tax inequity among competitors, unnecessary layers of regulatory compliance and tax collections, and the creation of a barrier for entry of new fuel storage capacity.
A modified B&O tax on petroleum is outlined in the report in which the tax would only be charged once at the beginning of the distribution process. To maintain a revenue neutral modification, the rate would be set at 1.54 percent and charged at the “terminal rack”—the same location the gas tax is currently collected. It would be paid by the party that sells the refined product over the “terminal rack” and the costs of the tax would trickle down through the distribution system in an equitable manner. The benefits of a B&O tax being collected just once at a single point in the process are: tax efficiency, preservation of state revenue, the creation a level playing field and the potential for minimized gas price spikes in the future.

Click here to read the entire study.

Want to do something about high gas prices???

In a recent conference, Fed Chairman Ben Bernanke essentially threw petroleum marketers and consumers “under the bus” of economic recovery. What Bernanke said  is that high gasoline, diesel and heating oil prices are unfortunate, but that he is not concerned enough yet to take action to ease prices.

Bernanke is essentially favoring Wall Street over Main Street. While investment bank earnings soar, Bernanke asks consumers to “toughen up” and accept higher fuel and food costs.  He sells this as the necessary medicine to cure our weak economy.

We believe a larger audience of consumers and business need to become more vocal in opposing these reckless monetary policies. If the Federal Government keeps printing money and devaluing the dollar, $5 or $6 gas is a real possibility.

Below is a video that states our possition. At the end of the video, it advises viewers to visit www.threebigreasons.com which connects them to PMAA’s capwiz site to send a letter to their Representatives and Senators.

Take action!  Take control of the rising price of gas prices.  Please take 2 minutes to watch the video below and then use your voice by visiting www.threebigreasons.com and send a letter today to your congressmen.


WOMA is the only association in Washington State that focuses on all aspects of the petroleum marketing industry and monitors legislative and regulatory issues involving fuel, energy, alcohol, tobacco, transportation, the environment, and the state budget and taxes.

WOMA members account for nearly 80% of all petroleum products sold in Washington State, including nearly 70 million gallons of heating oil to residential and industrial users.

By joining WOMA, you become a part of a team of oil jobbers, distributors, wholesalers, and oil heat dealers that can achieve more together than any single member can accomplish individually.

WOMA encourages a high level of business ethics and provides education, training and an exchange of ideas. Members have access to a variety of publications, conferences and scholarships, and are kept up to date on issues such as the state’s biofuels mandate.

WOMA also lobbies on behalf of petroleum marketers and oil heat dealers with state government agencies and the legislature in Olympia, and stays engaged with state and national associations, including PMAA, WPMA, and POC.