The state Department of Revenue notified Island County officials that a new fee that supports the county’s clean water utility will be subject to the business and occupation tax.

Public Works Director Bill Oakes said the notification wasn’t a surprise to county officials, who knew the fee would be subject to either a B&O or utility tax. He said the question for commissioners to consider is whether to pass on the 1.8 percent tax to property owners or for the county to pay the tax out of the clean water utility fund.

Residential property owners will have to pay a $39.13 clean water utility fee beginning next year. The fee for commercial or industrial properties is calculated based on the amount of impervious surface. The unpopular $62 septic fee was scrapped under the clean water utility.

The county will collect the clean water utility fee along with next year’s property taxes. The fee will fund a range of programs aimed at managing ground and surface water.