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The De Minimis Exemption: How the One Ton and $5 Million Test Works

By Oscar Pinzon, Seattle, WAPublished Legal facts checked

Does the de minimis exemption apply to my business?

It applies only if you are first a producer and then meet the description of a de minimis producer in RCW 70A.208.020(16). RCW 70A.208.020(29)(a) names the producer for each covered material, and the answer depends on the type of item and how it reaches Washington. Two other articles cover that step: the coverage checklist and the first distributor rule.

RCW 70A.208.020(16) describes a de minimis producer in three items:

Item What the statute says Year it looks at
(a) Tonnage Introduced less than one ton of covered materials Most recent fiscal year
(b) Revenue Global gross revenue, not including on-premises alcohol sales, of less than $5,000,000 Prior fiscal year
(c) Agricultural employer Less than $5,000,000 in gross revenue in Washington from consumer sales of agricultural commodities sold under the employer's own brand No year named

Item (a) ends with a semicolon and no conjunction. The only conjunction in the list is the word "or" at the end of (b), before (c). Read that way, the items are alternatives, and meeting one makes a producer de minimis. The statute does not state that rule in so many words. If you meet one item but miss another, confirm the reading with Ecology or a lawyer before you rely on it.

On that reading, a company far above the revenue line is still de minimis if it introduced less than one ton. A company with heavy tonnage is de minimis if its revenue is under the line. Both results follow from the "or", not from words the statute prints.

What changes once you qualify? RCW 70A.208.020(29)(b)(iii) says "producer" does not include de minimis producers. The duties in RCW 70A.208.040 are written for "a producer". A producer that is not a member in good standing with a registered producer responsibility organization or has not submitted an individual plan may not introduce covered materials into the state, beginning on a date given in the deadlines article. The chapter contains no registration or filing step for de minimis producers. Ecology can still ask you for information under RCW 70A.208.060(7), which applies to any person, so keep your workings.

How do I add up my tonnage?

The statute gives the line, not the method. Item (a) asks whether you introduced less than one ton of covered materials in your most recent fiscal year. RCW 70A.208.020 does not say how to weigh or add, so this method is built from its definitions.

  1. List what you introduced. "Introduce" means to sell, offer for sale, distribute, or ship a product within or into Washington (RCW 70A.208.020(22)). A product shipped to a Washington customer is introduced.
  2. List the packaging and paper on each product. Packaging is material used to protect, contain, transport, serve, or facilitate delivery of a product and sold or supplied with it to the consumer for personal, noncommercial use (RCW 70A.208.020(25)). A paper product is paper sold or supplied to a consumer for personal, noncommercial use, including flyers, brochures, booklets, catalogs, magazines and printed paper (RCW 70A.208.020(26)).
  3. Remove exempt materials. Covered material does not include exempt materials (RCW 70A.208.020(13)(b)). The list in RCW 70A.208.020(19) includes packaging for bulk construction materials and materials used to protect or store a durable product for at least five years. The paper definition also leaves out bound books, copy paper, newspapers, and magazines that have a circulation of fewer than 95,000 and include content derived from primary sources related to news and current events.
  4. Weigh what is left. Take the packaging weight per unit from supplier specifications or from a sample on a scale. Multiply by the units you introduced in the fiscal year. Keep one line for each covered materials type, such as paper, plastic, metal or glass (RCW 70A.208.020(14)).
  5. Add the lines and compare. The test is against one ton in total. "Less than one ton" means a total of exactly one ton does not meet item (a).

Before you rely on a number, decide these points and write down what you chose.

  • Which ton. The section does not define "ton" or say whether it means a short ton or a metric ton.
  • Which fiscal year. It does not define "most recent fiscal year". A business that does not close its books on the calendar year should record the year it used.
  • Whose items. Item (a) says the producer "introduced" the materials. It does not say whether that counts only items you are the producer of, or everything you sell, distribute or ship.
  • Rules to come. Ecology must adopt rules by 2028 to administer and implement the chapter (RCW 70A.208.060(2)(j)). The section does not say what they will cover.

How does the revenue test work, and what changes in 2031?

Item (b) counts global gross revenue for the prior fiscal year, not including on-premises alcohol sales. A Washington soap maker that also sells in other states counts those sales too, because the test is not limited to Washington. The only carve out is on-premises alcohol sales, and the chapter does not define gross revenue.

The line is "less than". Revenue of exactly $5,000,000 does not meet item (b).

Until January 1, 2031, the figure is less than $5,000,000. Beginning January 1, 2031, it is less than $5,000,000 as adjusted for inflation. The department must use the consumer price index for urban wage earners to calculate the annual adjustment, effective January 1st of each year, beginning January 1, 2031. Item (a), the tonnage line, carries no adjustment.

What is different for agricultural employers?

Item (c) is a separate test. It covers an agricultural employer, as defined in RCW 19.30.010, regardless of where the employer is located. That definition reaches any person engaged in agricultural activity, including growing, producing or harvesting farm or nursery products, or forestation or reforestation of lands.

The figure is not global revenue. It is gross revenue in Washington from consumer sales of agricultural commodities sold under the employer's own brand name. It must be less than $5,000,000, as adjusted for inflation as described in (b). The statute does not say whether sales made through retailers count as the employer's consumer sales.

The inflation wording in (c) points back to (b), and (b) starts its adjustment on January 1, 2031. The statute does not restate a date in (c). Items (a) and (b) sit in the same list, so an agricultural employer should run them too.

Common questions

What is a de minimis producer under the RRA?

A de minimis producer is a producer described in RCW 70A.208.020(16). The subsection lists three descriptions: less than one ton of covered materials, less than $5,000,000 in global gross revenue, and the agricultural employer test. RCW 70A.208.020(29)(b)(iii) says "producer" does not include de minimis producers, and the duties in RCW 70A.208.040(1) are written for "a producer".

How do I measure one ton of covered materials?

The statute names the line but no method. Count what you sold, offered, distributed or shipped into Washington in your most recent fiscal year. Keep the packaging and paper that fit the statute's definitions, remove exempt materials, weigh what is left and add it up by material. RCW 70A.208.020 does not say which kind of ton it means, so ask Ecology if you are close.

Do both the tonnage test and the revenue test apply?

The text points to alternatives, not a cumulative pair. The list in RCW 70A.208.020(16) has three items, and the only conjunction printed is "or", before the last one. Ecology or a lawyer can confirm the reading if you sit near a line.

What revenue counts toward the $5 million?

Item (b) counts global gross revenue for the prior fiscal year, not including on-premises alcohol sales. Sales outside Washington count. The chapter does not define gross revenue or say whether related companies are added together. Until January 1, 2031, the line is less than $5,000,000. Beginning January 1, 2031, it is less than $5,000,000 as adjusted for inflation.

Do agricultural employers follow the same test?

Not exactly. Item (c) is a separate test for an agricultural employer, as defined in RCW 19.30.010, wherever it is located. It counts gross revenue in Washington from consumer sales of agricultural commodities sold under the employer's brand name, with less than $5,000,000, as adjusted for inflation as described in (b). Global revenue is not the measure in (c).

What to do next

  1. Confirm you are a producer. Work through RCW 70A.208.020(29)(a) first, using the coverage checklist.
  2. Run all three items. Test tonnage, revenue and, if you are an agricultural employer, item (c). Write down each result and the year it covers.
  3. Save your workings. Keep sales by product for Washington, packaging weights, the exemptions you applied and the revenue figure. Under RCW 70A.208.060(7), on Ecology's request, to determine compliance with the chapter or to implement it, a person must furnish any information the person has or may reasonably obtain.
  4. Run the test again after every fiscal year closes. The inputs are fiscal year figures, so they change every year. Growth can move you across a line, and from January 1, 2031, the revenue line moves too.
  5. Ask Ecology if you are close. The Recycling Reform Act page lists an email address for the program team. Ask about ton, fiscal year and gross revenue.
  6. If none of the three items describes you, you are a responsible producer under RCW 70A.208.020(37), which means a producer that is not a de minimis producer. Start with how a small business prepares.

I am a Distinguished Committee Member of the SWANA Sustainable Materials Management Technical Division and a juror for the NYSAR3 Recycling Leadership Awards, both since 2023.

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General information, not legal advice.