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Waste Oil Fact Sheet

DEP Fact Sheet: Premium on Oil Changes Clean up of Waste Oil Site

POSTED OCTOBER 1, 2007

Effective October 1, 2007, a premium is imposed on all motor vehicle oil changes in Maine . The premium is $1 per oil change if the vehicle gross weight is less than 10,000 lbs; $2 if the gross weight is 10,000 lbs to 25,999 lbs; and $3 per oil change if the gross weight is 26,000 lbs or more.

A “motor vehicle oil change” is defined as “the changing of any lubricating oil classified for use in an internal combustion engine, transmission, gearbox, differential or hydraulics in a motor vehicle.” 10 M.R.S.A. § 1020(1)(E). Any person engaged in the service of providing changes of any of the above-mentioned lubricating oils must pay the premiums to the State Tax Assessor. Any person who owns a fleet of vehicles (defined as 3 or more registered to the same person) and who performs their own oil changes also must pay the premium.

In a September 20, 2007 bulletin, Maine Revenue Services announced that the sales tax return (Form ST-7) will be modified, beginning with the October 2007 return, to add an additional line to report these premiums. The use tax return (Form ST-7-U) will also be modified for use by fleet owners who change their own oil. See General Information Bulletin No. 97 http://www.maine.gov/revenue/salesuse/salestax/bulletinssales.htm .

Revenue from the premium will be used to help pay cleanup costs at four sites contaminated by a company that collected waste oil for recycling. The company—Portland-Bangor Waste Oil Services— went out of business in 1980 before the contamination was discovered . Under both state and federal law, responsibility for the cleanup costs now falls to the company's customers, i.e., the hundreds of businesses and individuals who generated the waste oil that was mishandled by the company. Those customers include auto dealerships, garages, municipalities and school districts, among others.

Last session, legislation resulting in the premium on oil changes was put forward by State Senator John Martin. See An Act to Assist in the Cleanup of Waste Oil Disposal Sites , P.L. 2007, c. 464. Revenues from the premium are deposited in the Waste Motor Oil Revenue Fund administered by the Finance Authority of Maine (FAME). FAME, in turn, is required to issue bonds to pay cleanup costs by or on behalf of eligible responsible parties at the four sites and use the revenue from the premiums to make the bond payments.

The four sites covered by the program are located in Casco, Ellsworth, Plymouth and Presque Isle. Total cleanup costs at these sites are expected to approach $30 million. The premium on oil changes will remain in effect until at least June 30, 2018, after which it will be discontinued when FAME notifies the State Tax Assessor that all costs have been paid.

Additional information:

  • For a copy of the enacted bill that established the premium on motor oil changes, go to: http://janus.state.me.us/legis/ros/lom/LOM123rd/PUBLIC464.asp
  • If you are subject to the premium and have questions about how to collect it and remit it to the Maine Revenue Service, call Darrell Lombard at (207) 624-9653.
  • If you are subject to the premium, click here for a sign that can be posted at your place of business to explain the premium to your customers.
  • If you have questions about the waste oil sites, please call Hank Aho or Mark Hyland at the Maine Department of Environmental Protection at 287-2651.