Under the headline fuel taxes sits a layer of small environmental fees that are easy to overlook and still have to be handled right. The best known is the LUST fee, a fraction of a cent that funds cleaning up leaking tanks. Tiny per gallon, but it adds up across millions of them.
What the LUST fee is
LUST stands for Leaking Underground Storage Tank. The federal LUST fee is a small per-gallon tax, 0.1 cent per gallon, on motor fuels, and it funds the cleanup of leaks from petroleum underground storage tanks. The trust fund behind it was established in 1986 to pay for remediation when a leak happens.
What the fund pays for
It funds the EPA and states in cleaning up petroleum tank leaks, especially where no solvent owner can be found or the owner cannot comply with a cleanup order, and it supports oversight and enforcement. It is the safety net behind the UST compliance rules that try to prevent those leaks in the first place.
Who pays
These small fees ride along with fuel through the supply chain, so they ultimately reach whoever buys the fuel, with the businesses in the chain responsible for collecting and remitting them. Beyond the federal LUST fee, many states add their own tank or environmental fees, so the exact set depends on where you operate.
Not the same everywhere
The federal LUST fee is nationwide, but states layer on their own tank fees, inspection fees, and environmental charges that vary widely. Two real examples show the spread. California charges a 2 cent per gallon underground storage tank maintenance fee on petroleum placed into a UST, twenty times the federal LUST rate. Texas takes a different shape entirely: a petroleum product delivery fee charged per load by the size of the receiving tank, such as $6.95 on a delivery into a tank of 8,000 to 10,000 gallons. Rates like these drift, so confirm current figures with each state before filing. That spread is part of why fuel tax across multiple states gets complicated, and why tracking each fee by jurisdiction matters for accurate filing.
Why tracking matters
These fees are small, easy to miss, and still must be collected and remitted correctly. A fee overlooked across many gallons adds up, and getting it wrong creates the same compliance headaches as a bigger error. FastDragon carries each fee by product and jurisdiction, so a charge like California's 2 cent tank fee lands on every invoice and filing without anyone remembering it by hand.
Answers to common questions
Does dyed diesel pay the LUST fee?
Yes. Dyed diesel skips the 24.3 cent federal highway excise, but the 0.1 cent LUST fee still applies to it. That is why even off-road gallons show a tiny federal charge on the invoice.
How much does the LUST fee add to a truckload of fuel?
About $8 on a typical 8,000 gallon transport load: 8,000 gallons times $0.001. A jobber moving 500 loads a year remits roughly $4,000 in LUST fees alone, which is why the fee needs its own line in the books even though no single load makes it look important.
Is the LUST fee included in the quoted federal fuel tax rates?
Yes. The commonly cited federal rates of 18.4 cents per gallon on gasoline and 24.4 cents on diesel already include the 0.1 cent LUST portion. Adding it again on top double counts it.
Do state tank fees follow the federal LUST rules?
No, each state designs its own program. Some charge per gallon, some charge per delivery, and some bill tank owners a flat annual amount. Registration, return forms, and due dates also differ by state, so every jurisdiction needs its own setup in your tax tables.