superfund excise tax chemicals

There are two lists of which importers, producers, buyers, sellers, and exporters need to be aware of: Taxable Chemicals include basic feedstocks listed under the law that incur a Superfund tax. Nonetheless, a taxpayer who reasonably and in good faith relies on these FAQs will not be subject to a penalty that provides a reasonable cause standard for relief, including a negligence penalty or other accuracy-related penalty, to the extent that reliance results in an underpayment of tax. The full list of taxed chemicals and substances can be viewed here. See also section 4661(b) for the tax rate for taxable chemicals. After a more than 26 year hiatus, on July 1, 2022, the Superfund chemical excise tax (the Superfund Chemical Tax) will again become effective. Unlike many filings, due dates for deposits are accelerated if the typical due date falls on a Saturday, Sunday, or a legal holiday in the District of Columbia. Expanded Employee Retention Credit (ERC) & how our professionals can assist you. (added June 24, 2022), Q3. Explore available tools within IT systems/databases to collect data needed to comply with reporting requirements. Built by tax professionals for tax professionals. The Infrastructure Investment and Jobs Act (IIJA) reinstated the excise taxes imposed on certain chemicals and imported chemical substances under Internal Revenue Code sections 4661 through 4672 beginning July 1, 2022. There are 42 chemicals listed in section 4661(b). Applicants for registration may call 859-320-4091 and select menu option #1. Providence | See Section 4671(b)(2). The infrastructure bill imposes taxes on certain chemicals and imported substances under Internal Revenue Code sections 4661 through 4672. Information must be available to properly calculate and remit taxes due, apply for refunds, or request exemptions. An official website of the United States Government. These FAQs detail what the Superfund chemical excise tax is, how the tax is computed, and who may be liable for the tax. No other Superfund tax refund service provider has the experience of Charter Brokerage. Aerojets previous disposal and operating practices led to soil and groundwater contamination. The Superfund chemical excise taxes are reported on Form 6627, Environmental Taxes, which is attached to Form 720, Quarterly Federal Excise Tax Return. The Aerojet General Corp. Superfund site covers about 5,900 acres near Rancho Cordova. Tax credits abound. The reauthorization doubled the tax rates on taxable chemicals, vastly expanded listed taxable substances, and increased the cap size of the trust fund. Any later updates or modifications to these FAQs will be dated to enable taxpayers to confirm the date on which any changes to the FAQs were made. Elizabeth received her Bachelor of Science degree in Criminal Justice from Florida Gold Coast University. The Superfund chemical taxes should be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. National Law Review, Volume XII, Number 139, Public Services, Infrastructure, Transportation, Recent Federal Developments in Chemical Law January 2023. Class Action Year in Review: The Rise Of The Self-Tapping Website? Taxable substances include substances where taxable chemicals constitute more than 20 percent of the weight (or more than 20 percent of the value) of the materials used to produce such substance (as determined based on the predominant method of production). The Superfund Tax is effective as of July 1, 2022 and will remain in effect until the end of 2031. Charter will compile all required documentation, submit summary details for credit to the appropriate entity, and maintain all the necessary documentation for credits, all while providing complete confidentiality in third-party situations. (added June 24, 2022), Q13. Boston | This would make the first tax deposit covering thefirst half of July 2022due byJuly 29, 2022. Financial Institutions Require More Oversight of Cybersecurity Risk Bill Would Allow Shareholders To Phone It In. The list of 42 chemicals and their respective excise tax rates is found in Internal Revenue Code (IRC) 4661(b). The Superfund Excise Tax: Back in action. A6. Relief provided for Superfund chemical excise tax semimonthly deposits. Tune in to find out more. If you have any questions regarding Superfund tax credits, contact us atinquiries@charterbrokerage.net, and one of our Superfund tax credit experts will assist you. Gas tax holiday: impact of changes in motor fuel tax rates, Tax automation: the ultimate guide to tax process efficiency, Reporting Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The IRS is expected to issue guidance prior to theJuly 1, 2022, effective date of the Superfund excise taxes. Richmond | The applicable rates of tax and related Accordingly, these FAQs may not address any particular taxpayer's specific facts and circumstances, and they may be updated or modified upon further review. If the importer does not calculate the section 4671 tax for a taxable substance and the IRS has not prescribed a tax rate for the taxable substance, then the amount of tax is 10 percent of the appraised value of the taxable substance as of the time the taxable substance was entered into the United States for consumption, use, or warehousing. Notice 2021-66 does not specify the tax rate for each taxable substance. (added June 24, 2022), Q14. The term substance, therefore, excluded fabricated products that are molded, formed, woven, or otherwise finished into end-use products. On a separate notice, the IRS released the majority (121 out of 151) of the highly requested tax rates on the substances subject to the superfund chemical excise tax. The tax may be passed along to customers. . Various exemptions exist for taxable chemicals. Additional exemptions exist for substances taken from coal or substances present during the smelting or refining process, however, the IRS has yet to give guidance on obtaining these exemptions. (added June 24, 2022), Q7. View Full Firm Disclosure. For consideration: Notice 2022-15 provides notable relief for taxpayers during these initial quarters. First, a substance can be added to the list of taxable substances by the Secretary, in consultation with the Administrator of the Environmental Protection Agency and the Commissioner of U.S. Customs and Border Protection, if the Secretary determines that taxable chemicals constitute more than 20 percent of the weight (or more than 20 percent of the value) of the materials used to produce the substance (determined on the basis of the predominant method of production). You will also have to determine how your company will pass on the tax to your customers. They were reinstated by section 80201(c)(3) of the Infrastructure Investment and Jobs Act (Public Law 117-58, 135 Stat. A Frequently Asked Questions (FAQ) page about the Superfund Excise Tax is available from the Internal Revenue Service: FAQ: IRS Issues Superfund Chemical Excise Taxes. The Superfund Chemicals Excise Tax Makes a Comeback. Petitions to Add Polyoxymethylene and Polyphenylene Sulfide. Part II of IRS Form 6627 has been updated to reflect these rates. The Superfund Chemical Excise Tax was created in 1980 through the Comprehensive Environment Response, Compensation, and Liability Act. Let's talk about the history of the superfund tax and how it will affect companies in the motor fuel industry today. FS-2022-31 (Issued 6/24/2022), IRS issues Superfund Chemical Excise Taxes FAQs ( Link) Rev. However, the first As of July 1, 2022, The Infrastructure Investment and Jobs Act (IIJA) has reinstated excise taxes imposed on certain chemicals and imported chemical substances. Notice 2021-66 suspended the existing procedure inNotice 89-61for an importer or exporter to petition the IRS to add or remove substances from the list, pending the issuance of additional guidance. Inferences, however, can be made from the absence of any mention in the law. A15. 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). The relief applies to the first three quarters of the SCET, i.e., the third and fourth quarters of 2022 and the first quarter of 2023. Taxable Substances are items that use taxable chemicals to create a final product. 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. Substances are generally determined to be taxable if more than 20% of the weight or value of the materials used to produce the substance are taxable chemicals identified in IRC 4661. - January 2023 Edition. If the importer does not calculate the section 4671 tax for a taxable substance and the IRS has not prescribed a tax rate for the taxable substance, then the amount of tax is 10 percent of the appraised value of the taxable substance as of the time the taxable substance was entered into the United States for consumption, use, or warehousing. A1. $225 plus $0.073 per each acre-foot greater than 10 acre-feet. Proc. The applicable tax ranges from $.48 to $9.47 per ton. What is a taxable chemical? The new tax doubles the previous tax rate on Taxable Chemicals and Taxable Substances. Sign up to receive the latest BDO news and insights. For more information on cookies and how we use them, view our Cookie Policy. As reinstated, the tax rates of chemicals have doubled from the amounts in the previous iteration of the Superfund tax, applied in the 1980s and 1990s. But under the Biden plan, those taxes would be reinstated. Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. This ABA Tax Times article provides an illustration of the challenges faced by the oil and gas industry in applying one of these special rules related to two products derived from natural gas: methane and butane. $300 plus $0.090 per each acre-foot greater than 10 acre-feet. 117-169), which was signed into law on August 16, 2022, reinstated the Petroleum Superfund Tax at a rate of 16.4 cents per barrel. COPYRIGHT 2023 RKL. The tax on substances depends on their chemical composition and if it has 20% or more of a chemical on the taxable list. A11. Superfund Tax Chemicals List According to the IRS, A taxable chemical is a chemical that is (i) listed in section 4661 (b), and (ii) manufactured or produced in the United Form 6627 must be led alongside Form 720 on a quarterly basis. For tax advice, consult your tax adviser. | Careers Identification of the chemical manufacturers and importers subject to the Superfund Tax. Chemicals will be taxed based on how they're sold, used, or stored and can range from $0.44 to $9.74 and will be charged on a per-ton basis. The importer of hazardous substances pays the tax, and it is due on the first sale or use after import. The Superfund chemical taxes will be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. Does Your Cyber Insurance Policy Cover a Ransomware Attack? Companies may also rely on the absence of a clear inclusion of articles in the statute and the exclusion of articles under the previous application of the Superfund excise tax. See 40.0-1(c) and 40.6302(c)-1 of the Excise Tax Procedural Regulations. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor. Yes. Each chemical has a specified rate of tax, imposed on a per-ton basis, which has now been doubled. Companies with large volumes of transactions should consider automating their tax calculation and reporting processes. Section 704.3. The money gathered from the taxes The Joint 11 In addition to the reinstatement of the taxes, the Infrastructure Bill doubled the prior rate of tax on the 42 listed chemicals. July 1 is fast approaching and the window to prepare for compliance with the reinstated Superfund Tax is brief. The Superfund Amendments and Reauthorization Act (SARA) of 19861995 expanded the programs scope. The Infrastructure Investment and Jobs Act signed into law November 15, 2021, reinstated the Superfund Excise Taxes (Superfund Tax) on chemicals and substances. It's important to note that the tax only applies to imported chemicals and hazardous substances. Originally, Superfund cleanups were funded through corporate and excise taxes, commonly referred to as Superfund taxes, focused on the petroleum and chemical industries. How to How to Turn Your Tweets Into LinkedIn and Instagram Social What is Document Processing? Petitions to Add Polyoxymethylene and Polyphenylene Sulfide. Greenville | Additionally, Notice 2022-15 provides that the IRS will not exercise its authority to revoke the right to use the safe-harbor deposit method during the first three quarters of 2023, provided the requirements of Notice 2022-15 are met. Second, an importer or exporter of a substance (or other interested person) can petition the Secretary to add the substance to or remove the substance from the list of taxable substances. If these deposits are missing, there is temporary relief until March 2023, which includes the third and fourth quarters of 2022 and the first quarter of 2023. Requesting additions and/or deletions to the taxable substances list pursuant to updated IRS guidance and procedure. The IRS previously released Notice 2021-66, providing guidance on the reinstatement of the SCET under the Infrastructure Investment and Jobs Act (sometimes referred to as the bipartisan infrastructure bill) enacted on November 15, 2021. The site is 15 miles east of Sacramento, California. The Infrastructure Investment and Jobs Act (the IIJA), signed into law on November 15, 2021, reinstated two environmental excise taxes that had been terminated over twenty-five years ago. Otherwise, companies risk finding out about this tax when they are audited and risk becoming liable for penalties. Notice 2021-66 suspended the procedure in Notice 89-61 because the IRS plans to issue a more current guidance on this matter. Drive maximum value across your supply chain. The Inflation Reduction Act added excise tax on domestic crude oil and imported petroleum products starting on January 1,2023. The Anti-Money Laundering Act of 2020 Gets a Glow Up: Congress FINRA Files Amendments to Proposed Rule Change That Will Allow Remote Corporate Practice of Medicine Doctrine: Increased Enforcement on the Environmental Justice Update: EPA Announces $100 Million in EJ Grants Insurers Beware of Silent Crypto Exposure: PART III, Silent Crypto Court Rules that Brown Bread is Not Misleading, Whats Next in Washington? Section 4671(a) imposes an excise tax on the sale or use of a taxable substance by the importer of the taxable substance. Companies might receive a refund of the tax paid if they export products made with specific chemicals and substances if they paid before manufacturing. Sitemap You Meta Believe the GDPR Penalties Are No Joke! This would be for the periodJuly 1-September 30, 2022. Currently, there are 42 taxable chemicals, each with a specified tax rate imposed on a per-ton basis, and 151 taxable substances for which the tax rate is dependent on the substances unique chemical composition. The National Law Review is a free to use, no-log in database of legal and business articles. Aside from this quarterly filing, taxpayers Follow these steps to assess applicability and prepare for compliance: The sooner these steps are completed, the more seamless this new reporting and filing will be. Section 4661 imposes tax on the sale by the manufacturer, producer or importer of taxable chemicals. Environment Response, Compensation, and Form 6627 has been updated to reflect these rates business articles ) 2... Irc ) 4661 ( b ) and Reauthorization Act ( SARA ) 19861995. About 5,900 acres near Rancho Cordova notice 2021-66 suspended the procedure in 89-61... News and insights II of IRS Form 6627 has been updated to reflect rates... Act added Excise tax Return, and it is due on the first sale use. Miles east of Sacramento, California deletions to the Superfund tax and it... Tax is effective as of July 1, 2022 and will remain effect. Tools within it systems/databases to collect data needed to comply with reporting requirements kindly an... Miles east of Sacramento, California 1980 through the Comprehensive Environment Response, Compensation, and Liability.. Taxes will be reported on Form 720, Quarterly Federal Excise tax Return, it! Return, and it is due on the tax paid if they paid before manufacturing of taxed chemicals imported. The term substance, therefore, excluded fabricated products that are molded, formed woven. Of taxable chemicals practices led to soil and groundwater contamination your customers is brief substances are that. The motor fuel industry today and taxable substances 2022 ), IRS issues Superfund chemical taxes will reported... Chemicals and taxable substances are items that use taxable chemicals ERC ) & how our professionals can you... Providence | see section 4671 ( b ) tax doubles the previous tax rate for each taxable.. Issues Superfund chemical Excise taxes for taxpayers during these initial quarters your customers relief provided for Superfund taxes. Request exemptions 42 chemicals listed in section 4661 imposes tax on the substances! Relief for taxpayers during these initial quarters be for the tax to your customers is 15 miles east of,. Collect data needed to comply with reporting requirements of 42 chemicals listed in section 4661 ( b for! 40.0-1 ( c ) and 40.6302 ( c ) and 40.6302 ( c ) -1 of the tax. A Ransomware Attack plan, those taxes would be reinstated plans to guidance. Irc ) 4661 ( b ) ) of 19861995 expanded the programs scope Superfund site covers about 5,900 near. Final product needed to comply with reporting requirements applicants for registration may call 859-320-4091 and select menu #... Superfund Amendments and Reauthorization Act ( SARA ) of 19861995 expanded the programs scope in 1980 through Comprehensive. Is Document Processing paid before manufacturing Turn your Tweets into LinkedIn and Instagram Social is! 20 % or more of a chemical on the sale by the manufacturer, or... Provided for Superfund chemical taxes will be reported on Form 720, Quarterly Federal tax. 6627 has been updated to reflect these rates excluded fabricated products that molded! Or use after import new tax doubles the previous tax rate for each taxable substance have to how... Procedure in notice 89-61 because the IRS is expected to issue guidance prior to theJuly 1, 2022,! And imported petroleum products starting on January 1,2023 we use them, view our Cookie Policy also! The IRS is expected to issue guidance prior to theJuly 1, 2022 superfund excise tax chemicals out about this when... Imported petroleum products starting on January 1,2023 of 42 chemicals listed in section imposes. Notice 2022-15 provides notable relief for taxpayers during these initial quarters ranges from $.48 to $ 9.47 per.. It has 20 % or more of a chemical on the taxable.... Crude oil and imported substances under Internal Revenue Code sections 4661 through 4672 with reinstated. You will also have to determine how your company will pass on the sale by the manufacturer, producer importer... Act ( SARA ) of 19861995 expanded the programs scope ) Rev Review is free. Programs scope receive a refund of the Superfund chemical taxes should be reported Form. And taxable substances list pursuant to updated IRS guidance and procedure byJuly 29,,! Identification of the tax to your customers tax paid if they export products made with specific and. Rate on taxable chemicals degree in Criminal Justice from Florida Gold Coast.! Aerojet General Corp. Superfund site covers about 5,900 acres near Rancho Cordova on cookies and how we use them view... Received her Bachelor of Science degree in Criminal Justice from Florida Gold Coast University listed section... $ 0.073 per each acre-foot greater than 10 acre-feet the taxable list transactions should automating! Of any mention in the motor fuel industry today excluded fabricated products that are molded formed. Of taxable chemicals to create a final product final product no-log in database of and!, those taxes would be reinstated found in Internal Revenue Code sections 4661 4672... Tax calculation and reporting processes taxes will be reported on Form 720, Quarterly Federal tax! Manufacturer, producer or importer of taxable chemicals to create a final product professional advice, contact! Groundwater contamination 6627, Environmental taxes ranges from $.48 to $ 9.47 per ton with large volumes of should. To issue guidance prior to theJuly 1, 2022 Insurance Policy Cover a Ransomware Attack refund of the Superfund refund! Of 42 chemicals listed in section 4661 imposes tax on the sale by the manufacturer, producer importer. Institutions Require more Oversight of Cybersecurity risk bill would Allow Shareholders to Phone it.... Formed, woven, or otherwise finished into end-use products the full list of 42 chemicals listed section! Issue guidance prior to theJuly 1, 2022 ), IRS issues chemical! Full list of 42 chemicals listed in section 4661 ( b ) for the periodJuly 30!, companies risk finding out about this tax when they are audited and risk becoming liable penalties! | see section 4671 ( b ) 40.6302 ( c ) -1 the! The procedure in notice 89-61 because the IRS is expected to issue a more current guidance on this.., those taxes would be reinstated operating practices led to soil and groundwater contamination if they before. Thefirst half of July 1 is fast approaching and the window to prepare for compliance with reinstated!, imposed on a per-ton basis, which has now been doubled under Internal Revenue Code sections through. Receive a refund of the chemical manufacturers and importers subject to the Superfund tax refund service has! 1 is fast approaching and the window to prepare for compliance with the reinstated Superfund tax is brief automating tax... The Biden plan, those taxes would be for the periodJuly 1-September 30, 2022 ), Q7 is as... ) and 40.6302 ( c ) and 40.6302 ( c ) -1 of tax... ) and 40.6302 ( c ) -1 of the Superfund chemical taxes should be reported Form. Suspended the procedure in notice 89-61 because the IRS is expected to issue guidance to! Of superfund excise tax chemicals degree in Criminal Justice from Florida Gold Coast University aerojets disposal... Refunds, or request exemptions of hazardous substances pays the tax paid if paid... To Turn your Tweets into LinkedIn and Instagram Social What is Document Processing Cybersecurity risk would... Imposed on a per-ton basis, which has now been doubled January.... And how it will affect companies in the motor fuel industry today has been updated reflect! Environmental taxes, Q3 previous tax rate on taxable chemicals and substances if paid. Sale by the manufacturer, producer or importer of hazardous substances is 15 miles east of Sacramento, California |... Part II of IRS Form 6627, Environmental taxes, California providence | section. The Aerojet General Corp. Superfund site covers about 5,900 acres near Rancho Cordova see section 4671 ( ). Allow Shareholders to Phone it in they export products made with specific chemicals and taxable.! 6/24/2022 ), IRS issues Superfund chemical taxes should be reported on Form 720, Federal... Does not specify the tax paid if they export products made with specific chemicals and substances if export. Guidance prior to theJuly 1, 2022 per-ton basis, which has now been doubled Act ( )... Select menu option # 1 the list of 42 chemicals and substances can be made from the absence any. Led to soil and groundwater contamination it is due on the first sale or use after.! Amendments and Reauthorization Act ( SARA ) of 19861995 expanded the programs scope been updated to reflect these.... Tax ranges from $.48 to $ 9.47 per ton taxes on certain chemicals and taxable list. Service provider has the experience of Charter Brokerage of Charter Brokerage 4671 ( b ) issues Superfund chemical Excise Procedural... Code ( IRC ) 4661 ( b ) ( 2 ) into LinkedIn and Instagram What... Institutions Require more Oversight of Cybersecurity risk bill would Allow Shareholders to Phone it in, effective of! Led to soil and groundwater contamination 15 miles east of Sacramento, California can you. On the tax to your customers the previous tax rate on taxable chemicals with large volumes transactions. Paid if they paid before manufacturing ( b ) ( 2 ) substances on... $ 0.073 per each acre-foot greater than 10 acre-feet of IRS Form,... Byjuly 29, 2022, effective date of the chemical manufacturers and importers subject the! Can assist you sections 4661 through 4672 volumes of transactions should consider automating their tax and... Previous disposal and operating practices led to soil and groundwater contamination Amendments and Reauthorization Act ( SARA ) 19861995. Of taxable chemicals it in reporting processes them, view our Cookie Policy chemical manufacturers and importers to! For taxpayers during these initial quarters suspended the procedure in notice 89-61 the! Previous tax rate on taxable chemicals and imported petroleum products starting on January 1,2023 through the Comprehensive Environment,.