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Enviro Groups Urge Lawmakers To Close Tax Loophole Benefiting Oil Companies

More than 20 environmental groups have joined together with a common priority this short legislative session: close what they say is a huge loophole benefiting big oil companies.

The Environmental Priorities Coalition includes big names like the Sierra Club, American Rivers, Fuse and the Cascade Bicycle Club. They don’t always see eye to eye on things, but when it comes to oil companies and the state tax structure, they’re all sure something’s not quite right.

“There’s no economic argument for this tax exemption and preferential rate, in any way,” said Rep. Reuven Carlyle, D-Seattle, the prime sponsor of a bill that would close the state’s biggest-ever tax loopholes.

Carlyle is the chair of the state finance committee, which means he has to know local economic history, including the forests and sawmills of the 1950s that once used sawdust to keep their refineries going.

“And it was immediately identified by the oil companies as a fantastic opportunity for their accountants, to make a ton of money,” he said.

Carlyle says a new law could extract $60 million from the state's five big oil companies this biennium alone. That money is supposed to fund public schools, per last week’s state Supreme Court ruling.

Carlyle’s co-chairman on the state finance committee, Terry Nealy, R-Spokane, agrees it’s time to get serious. He even echoes the line that our state tax structure is like Swiss cheese.

“We have over 650 tax exemptions. So if you don’t have some way of having some tax preferences, you’re going to not be able to attract certain businesses —maybe many businesses — into our state," he said.

Nealy says he’s not opposed to examining the loopholes, but he wants to be careful about the implications of any law that touches a bunch of job creators. He says Washington’s refineries generate jobs and economic drivers worth $1.7 billion.

And many are wondering whether closing this loophole may be the key to establishing a state income tax.

Bellamy Pailthorp covers the environment for KNKX with an emphasis on climate justice, human health and food sovereignty. She enjoys reporting about how we will power our future while maintaining healthy cultures and livable cities. Story tips can be sent to