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Delaware Headlines

Div. of Revenue announces new Hazardous Substance Cleanup Act rate for new year

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Delaware businesses subject to the Hazardous Substance Cleanup Act (HSCA) are seeing an increase this year.

The Hazardous Substance Cleanup Act was passed by Delaware’s General Assembly in 1990 to ensure funding is available to cleanup sites contaminated by toxic chemicals

DNREC administers the program with the state’s Division of Revenue collecting a tax from the over 700 sites identified as potential hazardous substance release sites.

“A few years ago - I think in 2018 - the Legislature passed a law that allowed the HSCA rate to vary depending on the prior year’s collection," said Jennifer Noel - the director of Delaware’s Division of Revenue. "The goal is to collect approximately $15 million each year, which DNREC projects would be sufficient to fund the projects that they need to fund for this purpose.”

Noel notes the adjustable rates cannot be lower than 0.675% or greater than 1.675%.

Collections plummeted in 2020 due to COVID. That means this year’s HSCA rate will hit the max of 1.675% and apply to taxable gross receipts from the sale of petroleum or petroleum products.

"Last year’s rate was pretty low - it was at 0.9067% and then this year our collections for this tax were in the $8 to $9 million range," said Noel. "So, as a result of the fact that it was so much lower, the rate has gone up to the maximum for this coming year.”

Noel says even at its ceiling, the rate is still very low and should not affect gas prices heading into the first full week of the year because the tax is incurred by sellers and cannot be passed on to consumers.

Collections are calculated by multiplying 0.9% - the original rate - by a fraction - with a numerator of $15 million and the denominator set by total collections between July 1 to June 30 of the prior year.