To stay logged in, change your functional cookie settings. 2Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), Pub. Federally Recognized Holidays, Employer Considerations for DOLs New AEWR Rule. The Superfund chemical excise taxes are reported on Form 6627, Environmental Taxes, which is attached to Form 720, Quarterly Federal Excise Tax Return. IRS announces Superfund chemical excise tax rates June 24, 2022 Download pdf (363.6 KB) The IRS today announced the prescribed tax rates for 121 taxable substances that are subject to the Superfund chemical excise tax imposed by section 4671 (a). The law imposes a tax on any taxable chemical sold by the manufacturer, producer, or importer. Specifically, the statute provides that to qualify as a taxable substance, taxable chemicals listed in IRC section 4662 must constitute more than 50 percent of the weight (or more than 50 percent of the value) of the materials used to produce such substance (determined on the basis of the predominant method of production).10. Importers Infrastructure Investment and Jobs Act (IIJA), Public Law 117-58, 135 Stat. A substance may be removed from the list of taxable substances if the Secretary determines that taxable chemicals constitute 20 percent or less of the weight and 20 percent or less of the value of the materials used to produce the substance . | Careers policy, Privacy Do not delete! 2023. The tax rate for taxable substances is dependent on the individual chemical composition of the substance.19 For example, if polypropylene is composed of 50% propylene (a listed taxable chemical), then the rate for polypropylene would be $9.74 x 50%, or $4.87. The reinstated Superfund Excise Tax is effective July 1, 2022, through December 31, 2031, absent extension. Ethylene and propylene may also be exempt, but only when used in the production of fuel (motor fuel, diesel fuel, aviation fuel, or jet fuel). See section 4672(a)(1). Chemical manufacturers and importers The following is an FAQ to help companies get up to speed on what the Superfund Chemical Excise Taxes will require of them. No. The Infrastructure Bill reinstated the Superfund Excise Taxes on chemicals and taxable substances, effective July 1, 2022.11 In addition to the reinstatement of the taxes, the Infrastructure Bill doubled the prior rate of tax on the 42 listed chemicals. The Superfund was to be financed through environmental excise taxes, including: (1) excise tax imposed on domestic crude oil; (2) excise tax imposed on imported crude oil and petroleum products; and (3) domestically produced and imported petrochemicals and inorganic chemicals. Telephone and Texting Compliance News: Regulatory Update February 2023. Part of the Tax News & Views podcast series. The Superfund Amendments and Reauthorization Act of 1986 was enacted as Pub. Fullwidth SCC. 4662(e). There are two separate Superfund chemical excise taxes: a tax on the sale or use of "taxable chemicals" under section 4661 of the Internal Revenue Code and a tax on the sale or use of imported "taxable substances" under section 4671 (all section references are to the Internal Revenue Code unless otherwise stated). Please see links for details: Learn more about Superfund Excise Tax changes effective July 1, 2022, including key considerations for dealings with the reinstated Superfund Tax on chemicals and substances. The chemicals Superfund tax was initially enacted in 1980 as a response to high-profile environmental disasters relating to hazardous waste. Form 6627 must be led alongside Form 720 on a quarterly basis. The consumer and political goals of reducing Americas dependence on foreign oil, enhancing national security, and greening the economy converge in biobased chemicals and advanced biofuels, the promising technology of producing commercial chemicals and fuels from renewable resources. A5. Companies with large volumes of transactions should consider automating their tax calculation and reporting processes. This box/component contains JavaScript that is needed on this page. Heard on: Revenue from a new excise tax on chemicals like Benzene and Mercury would go . Customer Reviews: Five-Star Enforcement and the Expanding Regulations. accounts, Payment, Tax Principal In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. The rationale for the fee collection point was so that the fee would be equally distributed among all hazardous waste generators and suppliers.6. The Superfund excise taxes are set to expire at the end of 2031. Along with the quarterly reporting requirements, taxpayers with a quarterly liability greater than $2,500 will be required to make semi-monthly tax deposits of the Superfund Excise Taxes. The Reinstated Superfund Excise Tax for Chemicals and Imported Substances As of July 1, 2022, The Infrastructure Investment and Jobs Act (IIJA) has reinstated excise taxes imposed on certain chemicals and imported chemical substances. FAQs Reporting shipping, and returns, Cookie A taxable substance is any substance that, at the time of sale or use by the importer of the substance, is listed as a taxable substance. Cherry Bekaert Advisory LLC and its subsidiary entities are not licensed CPA firms. When do the Superfund chemical excise taxes go into effect? A taxable substance is one that is . The specified. The section 4661 tax is imposed as a rate per ton of a taxable chemical. Expanded Employee Retention Credit (ERC) & how our professionals can assist you. Criminal Referrals and OSHA Violations, Part III: Industry Standards Oregon House Revenue Committee Set to Hear More About Pro-Taxpayer Buying or Selling a Small Business Government Contractor? (added June 24, 2022), Q9. US Executive Branch Update February 27, 2023. brands, Social A substance is listed as a taxable substance if it is listed under section 4672(a)(3), or if the Secretary of the Treasury or her delegate (Secretary) has added it to the list of taxable substances pursuant to section 4672(a)(2) or (4). As this question is likely to arise in the near future when the Superfund excise tax applies, the IRS can be expected to address this aspect. (added June 24, 2022), Q10. Assisting with risk analyses and internal processes (design or documentation). In addition to having deep tax technical knowledge surrounding federal excise taxes, Deloitte leverages leading technology tools and processes. (added June 24, 2022), Q2. 15I.R.C. L. 117-58. Corporate chrigong@deloitte.com. Temporary relief from the penalty for failure to deposit Superfund chemical taxes for 2022 (third and fourth calendar quarters) and the first calendar quarter of 2023 is inNotice 2022-15. During 1979 Senate discussions, it was estimated that expenditures for hazardous waste disposal sites related to chemicals would be $200 million (versus $40 million for sites related to crude oil).3 During this congressional hearing, it was determined that the proposed system of fees would cover: (1) crude oil; (2) petrochemical feedstocks; and (3) certain highly toxic and/or high-volume inorganic materials including heavy metals, halogens, acids, bases, and ammonia.4. IRS issues Superfund chemical excise tax rates IR-2022-132, June 24, 2022 WASHINGTON The Internal Revenue Service announced today that it has prescribed tax rates for 121 taxable substances that are subject to the Superfund chemical excise tax imposed by section 4671 (a) of the Internal Revenue Code (Code). On Aug. 16, 2022, the Inflation Reduction Act (IRA) reinstated a third excise tax, the Hazardous Substance Superfund Financing Tax Rate on Crude Oil and Petroleum Products. It is unclear whether and how the statute means to differentiate a substance from an article, and if so, whether the IRS would apply the definition of article under the Toxic Substances Control Act (TSCA). 19I.R.C. See section 4671(b)(3). For purposes of this part, if any organic taxable chemical on which no tax was imposed by reason of subparagraph (A) is isolated, extracted, or otherwise removed from, or ceases to be part of, an intermediate . For chemicals, the taxable event is the sale or use by the manufacturer, producer, or importer of the chemical, and the tax is due in the U.S. upon the first use or sale. Licenses for Exports to Are You Ready for the UPC? The Treasury Department and the IRS (collectively the IRS) have released Notice 2021-66, providing guidance on the reinstatement of the Superfund chemical excise taxes (SCET) under the Infrastructure Investment and Jobs Act (sometimes referred to as the Bipartisan Infrastructure Bill, or IIJA) enacted on November 15. Creditor Stung By Academy Of Motion Picture Arts And Sciences Bylaws. 4671(b). Cherry Bekaert: Tax, Audit and Advisory Services, Superfund Excise Taxes on Chemicals and Substances: How to Prepare, Maximize the Supply Chain Revolution Panel Discussion, 2023 Legislative Landscape: Expanding Opportunities for Manufacturers, The U.S. and Global Economic Manufacturing Outlook for 2023, Private Equity Industry Report: 2022 Trends and 2023 Outlook, Cybersecurity Maturity Model Certification, Business Intelligence and Data Analytics Services, Digital Strategy & Transformation Services, Government Contractor Consulting Services, SBA 8(a) Business Development Program Consulting Services, Information Technology Audit & Consulting, Cybersecurity Maturity Model Certification (CMMC), Outsourced Sales Tax Compliance and Managed Services, IRS issues Superfund Chemical Excise Tax Rates, IRS issues Superfund Chemical Excise Taxes FAQs, reinstated the Superfund Excise Taxes (Superfund Tax) on chemicals and substances. A11. Section 40.6302(c)-1(b)(2), for failure to make required deposits of Superfund excise taxes if the requirements set out in the Notice are met. The Revenue Reconciliation Act of 1990 further extended the Superfund Excise Taxes through December 31, 1995, after which point the Superfund Excise Taxes expired. Everyone loves infrastructure, but it pays to read the fine print. The Infrastructure Investment and Jobs Act, signed at the end of 2021, reinstates the Superfund chemical excise taxes under Sections 4661 and 4671 of the Internal Revenue Code. For taxable chemicals, the manufacturer, producer, or importer of the taxable chemical is responsible for reporting and paying the section 4661 tax to the IRS. This Superfund Tax is assessed only on importers of taxable substances and is due upon the first sale or the first use after import into the United States. Additionally, similar to what happened between 1990 and 1995 when importers and exporters petitioned the IRS to determine whether various chemical substances would qualify as taxable substances, taxpayers may again request a written determination from the IRS as to whether a product they export or import qualifies as a taxable substance, if its chemical makeup includes at least 20% of a listed taxable chemical in IRC section 4661.21 However, IRS Notice 2021-66 suspended prior guidance (IRS Notice 89-61) as to how to request this determination, and taxpayers await additional guidance from the IRS as to the procedure to do so. As explained in today's IRS release: Attorney Advertising Notice: Prior results do not guarantee a similar outcome. . (added June 24, 2022), Q6. automatically and accurately calculating the amount of excise tax owed. corporations, For A Review of the Developing Legal Landscape Surrounding the "Student-Athlete" Debate. These taxes were in place until 1995 to fund the Federal Hazardous Substance Superfund, but expired in 1995. Background Due to the complicated nature of the Superfund Excise Tax and the granularity of the tax rate structure, gaps in existing systems and processes may exist. CERCLA (and therefore the Superfund Excise Taxes) expired in 1985 but was extended for another five-year period through the Superfund Amendments and Reauthorization Act of 1986 (SARA), effective January 1, 1987.7 SARA expanded the Superfund Excise Tax on chemicals to include an additional tax on imported substances derived from taxable chemicals, effective January 1, 1989.8 This additional tax on taxable substances was structured to ensure that the amount of the tax correlated to the composition of the chemicals within the taxable substances.9 In other words, had the substance been purchased domestically, the Superfund Excise Tax on chemicals would have been included as part of the overall price of the substance. Orlando | Are semimonthly deposits required? Service. See questions 4-5 for more information on taxable substances and questions 7-9 for more information on calculating the tax imposed by section 4671 (section 4671 tax). L. 96- 510, 42 U.S.C. When is the first return due? The excise tax applies to companies that manufacture, produce, or import any of the 42 specific chemicals listed inSection 4661of the Tax Code, most of them common in consumer products, including ammonia, butane, benzene, and mercury. governments, Business valuation & The tax directly . 7Superfund Amendments and Reauthorization Act of 1986, Pub. The IIJA also reinstated the Superfund excise tax on the import for sale or use of any taxable substance underSection 4671of the Tax Code. The "Superfund Tax" is comprised of two separate taxesone covering the sale or use of taxable chemicals "by the manufacturer, producer, or importer thereof" pursuant to 26 U.S.C. Chicago | 429.Section 80201 of the IIJA reinstates the Superfund excise tax on certain chemical substances under Sections 4661 and 4671 of the Internal Revenue Code (Tax Code), effective July 1, 2022.Section 80201(c)(1) of the IIJA modified the method for determining . Among the many provisions in that legislation . 18I.R.S. The IIJA reinstates the two taxes with several modifications. Reg. Analyzing Superfund Excise Tax calculations and reporting requirements based on a companys unique business scenario. How do I calculate the section 4661 tax? Charlotte | Chemical tax to clean up toxic sites gets new life as part of infrastructure deal. The notice also addresses registration requirements to exempt certain sales and uses of taxable chemicals from tax. 17Prop. An official website of the United States Government. The Reinstated Superfund Excise Taxes. Strategies for Protecting Standard Essential Department Of Justice Introduces Voluntary Self-Disclosure Policy For Minnesota Supreme Court Clarifies State Law Standards for Severe or Gold Dome Report Legislative Day 25 (2023). 96-125 at 14878 (1979). EC Appeals European General Court Decision Annulling the Harmonized Weekly Bankruptcy Alert February 28, 2023. Boston | This message will not be visible when page is activated. Procedures to request an IRS determination to add or remove a substance from the list of taxable substances under Internal Revenue Code Section 4672(a) are in Revenue Procedure 2022-26PDF. ONESOURCE Determination gives companies the ability to quickly comply with Superfund Excise and Hazardous Substance taxes by automatically and accurately calculating the amount of excise tax owed. Cherry Bekaert LLP and Cherry Bekaert Advisory LLC practice in an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations and professional standards. The current list is published in IRC section 4672(a)(3) and attached as Exhibit B. 23I.R.C. The excise tax collection expired in 1995 but resumed on July 1, 2022. A9. Deloitte Tax Congress directed the Department of Treasury to publish an additional list of the taxable substances by January 1, 2022. Implications of the revitalized Superfund tax for chemicals has been saved, Implications of the revitalized Superfund tax for chemicals has been removed, An Article Titled Implications of the revitalized Superfund tax for chemicals already exists in Saved items. 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